Indian Crypto Firm Challenges RBI’s Bitcoin Banking Blockade
Flintstone Technologies Private Limited has filed a plea before the Dehli High Court which states that the new policy of Reserve Bank of India is “arbitrary, unfair, and unconstitutional.”
As reported earlier, the Reserve Bank of India has put a restriction on financial institutions from providing cryptocurrency exchanges with banking services. Now, another Indian company has filed a legal challenge against the new policy of the central bank.
A local news outlet Business Standard reported that last week Flintstone Technologies Private Limited which operates cryptocurrency trading and storage platform MoneyTrade Coin, filed a plea before the Dehli High Court. The petition states that the new policy of Reserve Bank of India is “arbitrary, unfair, and unconstitutional.” The Delhi High Court said that it will hear the case on May 24.
In the petition, Amit Lakhanpal, director of Flintstone avers, “When we started our business, we wrote to all relevant ministries and officials to ensure that our business model was in line with all statutory guidelines. But these arbitrary decisions by regulators and certain financial institutions have jeopardized our business interests. Today, we have been made to look guilty in front of our investors for no fault of ours.”
The central bank of India on April 6th, announced that institutions regulated by the RBI shall not carry out transactions and other basic financial services with individuals or businesses that deal in cryptocurrencies. In this regard, banks were given a three-month period to cut off banking services to such entities, or else RBI would take enforcement action. After this strict stance taken by the country’s central bank, the exchanges in India started looking to challenge the new policy.
A plea filed by Kali Digital Ecosystems was after many weeks taken up by the High Court of Dehli. Kali Digital Ecosystems is a startup that invested huge capital to launch a cryptocurrency exchange in August 2018. If the new policy gets implemented, the company will have to drop this project.
It is believed that the restriction will not be taken any further and government will not completely ban cryptocurrency trading. However, the banking blockade will make it hard for Indian cryptocurrency exchanges to offer crypto-to-fiat trading pairs. To address this, companies have already decided to offer crypto-to-crypto trading pairs.
Shivam Thakral, chief executive of cryptocurrency exchange BuyUcoin, told Reuters, “There is a positive sentiment in the industry that the government will not ban trading in cryptocurrencies, and even if formal banking channels cannot be used, people can move to crypto-crypto trading platforms.”
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