In a blog post, cryptocurrency exchange major Zebpay said that it will be shutting down its operations. The company, however, stated that its wallet will continue to work. This move comes five months after the Reserve Bank of India (RBI) banned banks and registered financial institutions from providing any service to crypto exchanges. Its circular titled, Prohibition on Dealing in Virtual Currencies (VCs), stated the last date for banks and other institutions to pull the plug on these services was July 6.
Zebpay cites the RBI ban as one of the major reasons for this decision. In the blogpost, the company said,
“Despite regulatory and banking problems along our journey, we continued to look for solutions as we did not want India to miss the bus of digital assets that power the public blockchain. However, the recent past has been extremely difficult. 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. As a result, we are stopping our exchange activities. At 4 p.m. today (28 September 2018)”
The company also said that it will be cancelling all unexecuted crypto-to-crypto orders and credit users' coins and tokens back to their Zebpay wallet.
Launched in 2012, Zebpay was previously called BuySellBitco.in and has raised close to $1 million in equity funding from angel investors Arjun Handa and Nagendra Chaudhary.
The crypto market hasn’t been doing well since January this year, with prices dropping.
While speaking to YourStory in July, Ashish Singhal, who runs cryptocurrency exchange aggregator CoinSwitch, said that around December last year and January this year, $75 billion of cryptocurrency was traded every day, and India saw volumes of $100 million traded daily.
This euphoria, however, did not last long and the daily global traded value of cryptocurrencies since fell to $10 billion, with India seeing under $10 million cryptocurrency transactions.
Other reasons can also be attributed to loss of global investor interest in cryptocurrencies and majors like Facebook banning ICOs and crypto advertisements.
Even as the screws are being tightened around these assets, cryptocurrency exchanges have not given up hope. After the RBI released its circular, three exchanges filed petitions in various high courts, and some players in the sector reached out to the Internet and Mobile Association of India (IAMAI).
The Supreme Court tagged all cases pertaining to the matter and there is an ongoing hearing about the matter.