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Major Indian Bitcoin Exchange Zebpay Shuts Down Due to Banking Freeze

Last Updated March 4, 2021 3:45 PM
Samburaj Das
Last Updated March 4, 2021 3:45 PM

Zebpay, one of India’s biggest cryptocurrency exchanges, has announced the shuttering of all exchange services on Friday following the central bank’s banking ban on the crypto industry.

Launch in 2015, Zebpay started trading with an app-only service that quickly became one of India’s most-downloaded bitcoin wallet and exchange apps. With a know your customer (KYC) model, Zebpay struck half a million downloads on Android – the country’s most-popular smartphone platform – in mid-2017 and quickly doubled to hit a million app downloads during 2017’s bear run in October.

The company forecasted up to half a million new users joining the platform every month at the time, up from 200,000 new users already joining the platform.

On its website, Zebpay indicates it has 3 million users using its iOS and Android apps, with support for 20 cryptocurrencies and 22 trading pairs.

Rumored to be in talks to raise an additional $4 million in funding at one stage, Zebpay is now stopping all exchange services at 1600 local time on Friday. The move is a direct consequence of a crippling policy introduced by the Reserve Bank of India (RBI), India’s central bank, to force all regulated financial institutions – including banks – from offering services to the domestic cryptocurrency industry.

In an announcement , Zebpay said:

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.

All unexecuted crypto-to-crypto orders will be canceled, Zebpay added, with all tokens to be credited back to customers’ wallets. The wallet service “will continue to work” for customers to deposit and withdraw their coins, the company said. However, it remains to be seen if wallet gains development support in the future.

In late June, Zebpay warned that fiat withdrawals could become impossible ahead of the looming banking ban that took effect on July 5, 2018. A day before the banking freeze, the company stopped all fiat deposits and withdrawals at the exchange. Other exchanges, meanwhile, are finding novel ways to circumvent the ban.

Calls to Zebpay’s representatives went unanswered at press time.

Featured image from Shutterstock.