Zebpay, one of India’s largest cryptocurrency exchanges with around 3 million users, has warned its customers that fiat withdrawals may stop in the near future, depending on the outcome of an upcoming court hearing.
The status of cryptocurrencies and crypto exchanges in India remains unclear. However, in April this year, the Reserve Bank of India (RBI) issued a notice to all regulated financial institutions in the country, barring them from doing business with crypto-related companies.
The order is currently being challenged in court by several crypto exchanges and other companies owing to its alleged lack of any legal basis, with a Supreme Court hearing scheduled for July 20, 2018.
Meanwhile, ahead of the hearing, Zebpay appears to be preparing for the worst. The exchange warned its users on its official website, essentially telling them to withdraw their fiat:
“As per a recent RBI action, banks have been told to discontinue banking services to those dealing with virtual currencies. 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 be not be [sic] able to honor withdrawal requests. Please continue only if you understand this risk.”
Zebpay’s warning triggered a panicked sell-off, which in turn led to a drop in Bitcoin prices in India.
However, the plummeting prices are not limited to India alone – the broader, global crypto market is undergoing a fresh downturn, with a widespread sell-off having sent Bitcoin dropping by 9% in the past 24 hours, while Ethereum and Litecoin have both fallen by around 12%. Pinpointing the exact cause may be difficult, but Japan’s tightening grip on crypto exchanges, coupled with the aftershocks of the Bithumb hack, may be contributing to the market’s bearish trajectory.