Zebpay Announcement: Your Rupee Withdrawals Could Stop

[krishnapramod]

July 5 is set as the date when all the banks of India would stop offering their services to cryptocurrency exchanges. With just a couple of weeks to go, Zebpay has made an announcement that although for the time being Rupee withdrawals are functional, it could stop making deposits and withdrawals impossible. If I am right Supreme Court would hear all the pending crypto related petitions on July 20. Don't know if RBI would enforce its directive on July 5 or would wait till the hearing on July 20. IMO, keeping your funds on Indian exchanges be it Bitcoin or Rupee until July 5 wouldn't be a good option.

https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=43574

This is a VERY IMPORTANT announcement in light of the recent Reserve Bank of India circular: DBR.No.BP.BC.104 /08.13.102/2017-18 dated April 6, 2018.

Our industry has approached the Supreme Court of India to challenge the circular, as we feel it is counterproductive, and against the interest of citizens. As a responsible corporation, we regard customer-protection and market-integrity as our primary objectives. In light of that, please note that if Zebpay bank accounts are disrupted, rupee deposits and withdrawals will become impossible. This can cause discontinuation of crypto trade based on rupees, or at least cause significant price movements. This is something you should keep in mind if you choose to hold rupees in your Zebpay account.

Please note that you will not be able to withdraw rupees unless Zebpay has banking services that permit such withdrawal. Also, in case of disruption of banking services to Zebpay, you hereby indemnify Zebpay, and agree to hold Zebpay free and harmless at all times, against all claims, proceedings, expenses, costs, actions in the event of any prejudice and/or loss being caused to you by any act or omission by Zebpay or any other party, in regard to your rupee balance, transactions, trading, deposit, or withdrawal.

Of course, since our bank accounts are functional at the time writing this announcement, you are welcome to place a withdrawal request for your rupee balance. If you do that, we will endeavor to return your rupee balance to your bank account as soon as possible, so long as our banks support such withdrawal. If you choose to withdraw your rupees, please make sure to also cancel your unexecuted trade orders if any.

Regards,
Zebpay Team

[1715291883]

1715291883

[1715291883]

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[1715291883]

1715291883

[gentlemand]

Either get clarification from the banks on what happens to customer funds and act accordingly or stop dealing with Rupees. I would not use an exchange that told me whatever happened was my problem. That's not professional in the slightest.

[jseverson]

Either get clarification from the banks on what happens to customer funds and act accordingly or stop dealing with Rupees. I would not use an exchange that told me whatever happened was my problem. That's not professional in the slightest.

From what I understand, they're not taking any responsibility for whatever happens to customers' rupee balance once their banking service is disrupted. I assume customers will still be able to trade coins freely and can keep them, but without the option of cashing out or cashing in. I'd say that's perfectly reasonable in light of the central bank circular, but it does seem like the statement has loopholes that could be exploited.

If I were a customer, I'd probably avoid cashing out because the withdrawal rush may delay my withdrawal to beyond July 5, at which point they may not take responsibility for any loss anymore. If there aren't any delays, I'd definitely take everything out ASAP.

[gentlemand]

From what I understand, they're not taking any responsibility for whatever happens to customers' rupee balance once their banking service is disrupted. I assume customers will still be able to trade coins freely and can keep them, but without the option of cashing out or cashing in. I'd say that's perfectly reasonable in light of the central bank circular, but it does seem like the statement has loopholes that could be exploited.

Presumably it's major league arse covering, but that wording covers the complete loss of your Rupee balance which also infers that you may not be able to withdraw by buying coins and taking them elsewhere. Your money will be gone and it's your problem.

That's the bit they should be seeking clarification on. If they can't then they should give people notice now while accounts are still functioning and then wait. I presume everything would be fine but it's down to them to look into it.

[krishnapramod]

From what I understand, they're not taking any responsibility for whatever happens to customers' rupee balance once their banking service is disrupted. I assume customers will still be able to trade coins freely and can keep them, but without the option of cashing out or cashing in. I'd say that's perfectly reasonable in light of the central bank circular, but it does seem like the statement has loopholes that could be exploited.

Presumably it's major league arse covering, but that wording covers the complete loss of your Rupee balance which also infers that you may not be able to withdraw by buying coins and taking them elsewhere. Your money will be gone and it's your problem.

That's the bit they should be seeking clarification on. If they can't then they should give people notice now while accounts are still functioning and then wait. I presume everything would be fine but it's down to them to look into it.

After their last announcement, just received a mail from them clarifying things a bit.

Q) So if I have INR balance in my Zebpay account after your bank accounts are shut, will I never get my money back?

A) If crypto-INR pairs are trading on Zebpay after our bank accounts shut, you can buy crypto and withdraw that. But if either the crypto-INR trading price is not suitable, or such crypto-INR trading is infeasible, the INR will still belong to you. It is beyond our ability to guess if / when we will be allowed to withdraw such money to your bank account. It is precisely because of this risk that we felt like we owed it to our customers to release the announcement well in time. Our hope is that our customers will appreciate that we are acting in their best interest, even at a significant detriment to our own business interests.

Better to withdraw any INR balance.

[onrise]

One thing they did good is that they have clearly communicated to all the people about the process which they are going through and what could be the end result of it in advance rather than after banks accounts are frozen or something happens etc then informing which would have made no point.

[audaciousbeing]

July 5 is set as the date when all the banks of India would stop offering their services to cryptocurrency exchanges. With just a couple of weeks to go, Zebpay has made an announcement that although for the time being Rupee withdrawals are functional, it could stop making deposits and withdrawals impossible. If I am right Supreme Court would hear all the pending crypto related petitions on July 20. Don't know if RBI would enforce its directive on July 5 or would wait till the hearing on July 20. IMO, keeping your funds on Indian exchanges be it Bitcoin or Rupee until July 5 wouldn't be a good option.

https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=43574

Since the case is in court already I think its little to early for both parties to start preempting the court judgement. What I expect the lawyers to the cryto side to do was to ask for some preliminary injunctions that both parties should maintain status quo pending the determination of the suit filed. The RBI is surely in the position of strength in this situation because they are always 'right' when exercising their powers and claiming its within the establishing Acts until rule otherwise by a constituted authority just like the situation that is being contested in court currently.

Personally, I will not be optimistic because the decision is still about the Judges on the bench who will be deciding the decision and coming from the Supreme courts means they won't be recent judges considering the qualifications needed to be appointed as a judge in the highest court of the land and these are people who mostly love the way things are being done without being challenged. We can only hope for the best.

[Lancusters]

One thing they did good is that they have clearly communicated to all the people about the process which they are going through and what could be the end result of it in advance rather than after banks accounts are frozen or something happens etc then informing which would have made no point.

It really shows the decency of the team. They deliberately go to the losses in order to warn users about the danger. I think we need to remember this team and without fear to participate in their future projects. I think they will definitely open their business in another jurisdiction. In the end, the government of India will trigger capital outflows by such actions.

[marielbeckham]

Didn't expect this to happen. Is there a link for an official statement regarding this?

[avikz]

July 5 is set as the date when all the banks of India would stop offering their services to cryptocurrency exchanges. With just a couple of weeks to go, Zebpay has made an announcement that although for the time being Rupee withdrawals are functional, it could stop making deposits and withdrawals impossible. If I am right Supreme Court would hear all the pending crypto related petitions on July 20. Don't know if RBI would enforce its directive on July 5 or would wait till the hearing on July 20. IMO, keeping your funds on Indian exchanges be it Bitcoin or Rupee until July 5 wouldn't be a good option.

https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=43574

The latest update on this case:
Supreme court initially kept the next hearing date as 20 July, however, keeping in mind that the RBI circular would come into effect from 5th July 2018, they have decided to pre-pone the hearing date of 3rd of July. The division bench of Supreme Court of India will hear the case on 3rd July and we expect to have an interim injunction on the RBI circular on that date.

To know more read below,
https://bitcointalk.org/index.php?topic=3350109.msg40859847#msg40859847

[Virtual miner]

Either get clarification from the banks on what happens to customer funds and act accordingly or stop dealing with Rupees. I would not use an exchange that told me whatever happened was my problem. That's not professional in the slightest.

From what I understand, they're not taking any responsibility for whatever happens to customers' rupee balance once their banking service is disrupted. I assume customers will still be able to trade coins freely and can keep them, but without the option of cashing out or cashing in. I'd say that's perfectly reasonable in light of the central bank circular, but it does seem like the statement has loopholes that could be exploited.

If I were a customer, I'd probably avoid cashing out because the withdrawal rush may delay my withdrawal to beyond July 5, at which point they may not take responsibility for any loss anymore. If there aren't any delays, I'd definitely take everything out ASAP.

This is highly unprofessional attitude. I mean how can they escape from taking over the responsibility of their customer's holdings just like that!! 
If they are to work under the purview of the commanding authority then they must also take out certain safeguards for their age old customers who have entrusted everything with them. This is not how the system works. Now that the announcement by Zebpay has made the situation clear, people should not sit idle and do something to mitigate the losses that have occurred and could occur in the future.

[Theb]

It all lies in their Supreme Court now trashing the memorandum circular will be easy for the Supreme Court to do, now it all rest into who will the Supreme Court side, if their justice system is really fair and open they will know that what RBI is doing is out of hand, they are simply hindering cryptocurrency related businesses in order to transact to their clients freely. Without the use of banks they are crippling their business, and it really looks like they are doing it on purpose, they are simply giving this exchanges unfair competition. Now if the SC will not be in favor of them then their last resort would be going through petition that will hopefully be seen by the Executive department of India.

[timerland]

Yes, withdraw your funds asap from these exchanges, because once RBI regulations start kicking in it'll be unclear how you could get your funds out. You will still probably be able to withdraw your funds in BTC, but I doubt that there will be demand for rupee balances stuck on these exchanges.

Didn't expect this to happen. Is there a link for an official statement regarding this?

Well, this has been announced ages ago by the RBI. So it's really expected by everyone, it's just that it's only coming into effect now.

It's important to note though that these regulations imposed by the RBI are only applicable to banks, and you are still able to trade bitcoin freely with other payment methods. I expect that p2p trading within India with various payment methods becoming a lot more popular following this announcement from major exchanges.

[avikz]

Either get clarification from the banks on what happens to customer funds and act accordingly or stop dealing with Rupees. I would not use an exchange that told me whatever happened was my problem. That's not professional in the slightest.

From what I understand, they're not taking any responsibility for whatever happens to customers' rupee balance once their banking service is disrupted. I assume customers will still be able to trade coins freely and can keep them, but without the option of cashing out or cashing in. I'd say that's perfectly reasonable in light of the central bank circular, but it does seem like the statement has loopholes that could be exploited.

If I were a customer, I'd probably avoid cashing out because the withdrawal rush may delay my withdrawal to beyond July 5, at which point they may not take responsibility for any loss anymore. If there aren't any delays, I'd definitely take everything out ASAP.

This is highly unprofessional attitude. I mean how can they escape from taking over the responsibility of their customer's holdings just like that!! 
If they are to work under the purview of the commanding authority then they must also take out certain safeguards for their age old customers who have entrusted everything with them. This is not how the system works. Now that the announcement by Zebpay has made the situation clear, people should not sit idle and do something to mitigate the losses that have occurred and could occur in the future.

I doubt your view here. It is not at all a unprofessional attitude. Instead it is very good for the customers because the exchange is informing this news to its customers well in advance. They can't do anything because the RBI circular will come into effect from 5th July onwards. So the exchange is expressing their concern on the situation and it is actually a notice to the users to withdraw their funds. If they didn't inform this in advance, a lot of bitcoins will get stuck after the 5th July. It is a huge loss for them if all customer withdraw their bitcoins and funds within a short period of time, still they informed us about their concerns. It's commendable! I see no unprofessional attitude here!

[magneto]

Unfortunately, this was expected to happen due to the reserve bank of India's decision to regulate (or rather restrict) banks that are operating under itself so that the banks are forced into not dealing with these crypto exchanges or other crypto businesses.

It honestly doesn't make sense, it'll just mean that users will now turn to dealing with cash, instead of bank.

But the smart thing to do right now is to definitely try to get your funds out. Nobody knows what's going to happen with fiat withdrawals after the restriction takes place since banks are technically not allowed to process them anymore. The earlier you get out, the better.