On 5th April 2018, RBI deputy governor BP Kanugo announced, “In view of the associated risks, it has been decided that, with immediate effect, entities regulated by RBI shall not deal with or provide services to any individual or business entities dealing with or settling VCs. Regulated entitie which already provides such services shall exit the relationship within a specified time.”
It clearly means Indian govt is barring RBI regulated entities from dealing in or with cryptocurrency. Right after the announcement, several cryptocurrencies like bitcoin was trading at as low as Rs.3,75,000. Not only this, but People started to sell out their holding over virtual crypto assets in fear of loss. Recently many users reporting that their banks are refusing to accept payment when they’re trying to withdraw their money from Indian cypto exchanges like BitBns. In this situation Indian Cryptocurrency exchanges like Zebpay, Unocoin, CoinSecure, BuyUcoin and BTCX India are planning to shift their head offices from India to countries like Singapore, Delaware or Belarus.
RBI provided all banks a time period of months to regulate and refrain from providing any services to individuals or business entities dealing with or settling cryptocurrencies. Currently Indian exchanges can do only two things – either to shut down their business or move their business to abroad where they will be free from some of the Indian jurisdiction. India’s laws will not be applicable to those exchanges anymore if they shifts their bases outside of India. Permanent establishment is a concept in taxation that determines which jurisdiction has the right to tax the company. Many exchanges are already in talk with their advisers about various tax structures.
Shivam Thakral, CEO of unocoin said,“We have to move our company to some foreign country where regulations allow opening of bank accounts plus we won’t be dealing in fiat currency. It will become a global operation rather than an India centric operation.”
According to Sidharth Sogani, founder, Block Next Solutions,“Most of the Indian exchanges have their offshore company in Singapore and the US. They (bitcoin companies) have to move overseas but you can still access their website as well as their exchanges and do crypto to crypto trade.”
But that’s no the end, also Indian cryptocurrency exchanges like Unocoin, Coinsecure, and Zebpay are considering to challenge RBI’s regulations from engaging in the cryptocurrency trade. Coinsecure is discussing the matter with industry stakeholders like Blockchain and Cryptocurrency Committee of India and the Internet and Mobile Association of India. Indian Cryptocurrency exchanges like Unocin, Zebpay, Coinsecure are going to mount a legal challenge in the supreme court.
Jincy Samuel, Coinsecure cheif operating officer told, “We, along with the other industry players are in talks with IAMAI and BACC to see if they could help us in getting a hearing at the Supreme Court to see if stay orders are possible on the current decision of the RBI.”
In a current statement, Zebpay stated, “We remain committed to keeping customer funds and assets secure, and are exploring various options. However, sudden disruption in banking services could affect our ability to service deposits and withdrawals, until banking services are restored.”
“you can still continue to use our platform as before and if need be you can still withdraw your funds. As on today, no banks (that we are working with) have issued any notice to us and when they do and if it has an impact on you and /or us, we will surely communicate to you” Unocoin CEO, Co-founder Sathvik V said in statement.
As per Zebpay’s CEO Ajeet, they’re not going to stop their services at any cost and finding alternerte solutions. Khurana Tweeted, “We will continue to do what is best for our customers, and what is best for our country. Am studying the present situation and will react shortly and we will emerge stronger.”
Recently Bitbns – Digital Asset Exchange in India has started a petition to protest RBI’s decision of banning cryptocurrency trading in India. However please take a few minutes, and sign this petition on Chnage.Org to stand together and Make India at the forefront of Blockchain Applications revolution.