It seems that things for cryptocurrency exchanges and startups in India are not good at all since the strange cryptocurrency ban that hit the country was declared earlier this year. The Reserve Bank of India sent a circular to all banks to stop dealing in cryptocurrencies and also to stop serving exchanges and enterprises who dealt with cryptocurrencies, a thing that was said to close the cryptocurrency economy of the country. And this resolution has already found its first victim in the form of Zebpay, one of the most traditional and trusted exchanges in the whole country.
Despite this resolution having been hinted by the same Zebpay CEO on a video where he exposes his different points of views and also informs the return of all fiat deposits to their customers’ accounts, it was a surprise for most traders who still thought that Zebpay could survive in different ways to this ban.
However, the Zebpay team finally gave the bad news through a blog post in Medium and also through a tweet informing that all of the orders would be canceled and the money would be returned to the clients’ account. Zebpay, having a trading business of more than 4 years would shut down its operations due to the bank blockade ordered by the Reserve Bank.
This kind of situation is not new in any way and is has happened before In countries like Chile and Brasil, but this is the first time that a big exchange like Zebpay gets beaten by the regulators. So far, there are alternatives to cryptocurrency trading, but it is unlikely to know if these other exchanges won’t be also restricted in the scope of their operations. Exchanges do need of banking services to function properly, to pay for expenses and taxes, and to maintain a base for meaningful cryptocurrency trading.
Regulators have hit cryptocurrency startups pretty hard in India, and by the look of it, this situation will make other exchanges fall shortly.