As the deadlines were declared by RBI, Zebpay will not be able to entertain the customer’s request after banks will discontinue its services.
As the dealdline for banks working with cryptocurrency in India is going to expire on 5th July, users were asked to withdrew their money before the deadline finish. This advice is made by one of the biggest cryptocurrency exchange Zebpay , with this statement downfall in Bitcoin and Ripple prices on Zebpay could be seen. The company has denied the increase in price volatility. As the deadlines were declared by RBI, Zebpay stated that they will not be able to entertain the customer’s request after banks will discontinue its services. This decision could lead to bewilderment among over 30 lakh Zebpay users. Prices of the volatile bitcoin on Zebpay is Rs 4,22,550, which is well below Rs 6 lakh in the previous month.
As per the action of Reserve Bank of India, banks dealing with virtual currencies have been told to discontinue banking services, said the online Bitcoin exchange, in a statement on its website, adding that though the matter is being challenged in the court, it is sub judice and that the exchange can’t assure the safety of people’s money if banks stop providing services.
“While our industry is challenging this legally, the outcome is beyond our control. Hence, if you are holding any rupees, or depositing any rupees in Zebpay, there could soon come a time when we may not be able to honour withdrawal requests. Please continue only if you understand this risk,” said the company statement.
The circular issued by RBI on April 6 was challenged by digital currency exchanges, saying that it is against the interest of citizens. The company has said that if Zebpay bank accounts are disrupted, rupee deposits and withdrawals will be hindered . “This can cause discontinuation of crypto trade based on rupees, or at least cause significant price movements,” said the company.
People who are dealing with digital money accounts were requested to place withdrawal applications within the time period they are having banks support for these currencies. Mumbai-based Zebpay deals in cryptocurrencies like Bitcoin, Ethereum, Litecoin, Ripple and few other digital currencies.
In a circular on April 6, the central bank called for the ring-fencing of regulated financial entities such as banks from risks associated with virtual currencies. Heeding the RBI’s warning, various banks in the country ‘prohibited’ customers from transacting in virtual currencies and gave these regulated entities three months to stop their business activities with the companies or individuals dealing in digital currencies. “If they (cryptocurrencies) grow beyond a critical size, they can endanger financial stability,” BP Kanungo, RBI Deputy Governor, said in April.
Banks asked traders and online marketplaces to stop using their services for venture capital activities, following which they moved the Supreme Court against the RBI restriction. The hearing in the case is scheduled for July 20.
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