Zebpay Shuts Down Exchange Services as Regulation Bites

Zebpay, an Indian cryptocurrency exchange-operator, announced this Friday that it will cease operating as a cryptocurrency. Updating its clients via its Medium blog, the broker said that problems with Payments Payments One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl Read this Term and banks meant it wasn’t feasible for it to continue operating its exchange service.

Indian authorities have treated cryptocurrency in a rather mercurial fashion over the past couple of years. In April of this year, for example, the Reserve Bank of India (RBI) - the country’s central bank - announced that firms had three months to cease any cryptocurrency exchange activities.

A month after that ban went live, in August, reports were circulating that the central bank had launched its own cryptocurrency research unit. Funnily, that unit was launched in July - the same month the ban on exchanges went into effect.

Zebpay - Sucked into a Web of Regulation Regulation Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority ( Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority ( Read this Term

For some time, cryptocurrency exchanges have been able to survive - albeit in a weakened form - due to a loophole in the cryptocurrency exchange ban. Regulators stipulated that cryptocurrency to fiat exchanges were prohibited but left out cryptocurrency to cryptocurrency exchanges.

As a result, exchanges such as Zebpay were able to continue operating. It seems problems, however, have been mounting with payments and banks.

Just as many Chinese foreign exchange brokers have struggled with payment-service-providers, it appears Indian regulation has made it difficult for exchanges such as Zebpay to get access to payment services and bank accounts.

“The recent past has been extremely difficult," said the company’s statement. “The curb on bank accounts has crippled our, and our customer’s, ability to transact business meaningfully.”

Despite no longer offering cryptocurrency, Zebpay will not be shutting down just yet. According to the company’s statement, it will continue to allow its users to access their cryptocurrency wallets.

The fate of India’s cryptocurrency exchanges will be determined by an ongoing court battle between them and the RBI. Final arguments from the petitioning exchanges were expected to be heard on September 11th but, as of yet, there has been no final decision.