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Zebpay, the most prominent cryptocurrency exchange in India, is officially closing its doors. All trading was halted today due to the country’s banking ban.
Just hours after Zebpay’s announcement, it cancelled all orders and credited all coins to wallets. They said that the “Zebpay wallet will work even after the exchange stops” but that exchange was officially closing its doors. Many were caught by surprised, to say the least. With no prior indication they were closing their doors, some were lucky that Zebpay decided to even allow their wallets to stay open.
The closure of the exchange comes three months after the July 6th deadline set by the Indian government. That deadline was for any banks to comply with the Reserve Bank of India’s wholesale ban on all services offering crypto or which were related to it. This effectively cut off the entire financial sector within India from cryptocurrencies and made it impossible to invest in the space. Although Zebpay could have still operated as a crypto-to-crypto exchange, it’s position in India was always tenuous and it has now paid the price.
Although Zebpay halted all transactions relating to fiat deposits and withdrawals in July, it seems that this was not enough for the scrutiny of the state.
Zebpay has responded to these statements by saying:
“The curb on bank accounts has crippled our, and our customer’s, ability to transact business meaningfully. At this point, we are unable to find a reasonable way to conduct the cryptocurrency exchange business.”
The situation in India still looks grim for cryptocurrencies. Not only is the complete ban now in effect, but the Supreme Court has repeatedly delayed ruling on the ban. Although it is supposed to be the final appeal, it still has not formally announced when it will decide. This means that India and its cryptocurrency sector could be in financial limbo for some time now. In the past few months, many banks and crypto-related firms within India have been taken to court and a legal battle behind-the-scenes has been dragging out for months. Zebpay, seemingly, could not remain solvent long enough for the Indian Supreme Court to make their decision.
In January 2018, India has 10 cryptocurrency exchanges with 5 million users with a monthly volume of $1.5 billion. Since then, this number has plummeted as more and more exchanges are closing their doors. Right now, India looks to be a hostile legal environment for cryptocurrencies for the foreseeable future.