This comes after RBI through an “informal” diktat asked banks to stop dealing with cryptocurrency exchanges.
In the last month or so, some of the banks have stopped providing services to the exchanges, which has led to a major disruption.
The exchanges were somehow managing their business through payment processing companies such as Paytm or P2P transactions.
However, Paytm too stopped providing services to the exchanges from last week, ET first reported on May 21.
The exchanges are now coming together to seek clarity around the payment choke. Insiders say there is a growing discomfort as banks have restricted their services to facilitate transactions.
“Even after last year’s Supreme Court verdict where it quashed the RBI order to ban crypto transactions, the banks are not lending their services to crypto exchanges and crypto traders,” said Ashish Mehta, co-founder DigitX, a cryptocurrency exchange. “Keeping this issue in mind and the impact on business activity, most of the major crypto exchanges are looking to knock the door of the Supreme Court again to get a clear cut directive regarding banking services so that uninterrupted transaction services can be provided to the traders/investors.”
Industry experts say several investors are facing issues in depositing and withdrawing money from Indian-focussed crypto exchanges.
“Many of them were not able to utilise the sharp drawdown which happened last week,” said Amit Maheshwari, tax partner at AKM Global, a tax consulting firm. “This uncertainty after the SC decision is not helping anyone and crypto exchanges would lose trust with the public if such policy indecisiveness continues. Changing partner banks every few days is a big issue for all crypto exchanges as well as the investors. There seems to be a disconnect between what the government is suggesting and what RBI is doing.”
In April 2018, the banking regulator had issued a circular and asked all the financial institutions — banks and NBFCs — to stop providing services to cryptocurrency exchanges.
Following this, cryptocurrency exchanges had dragged the RBI to the Supreme Court.
Last year, the Supreme Court quashed RBI’s circular, paving way for cryptocurrency exchanges to restart their operations.
“I am aware of the plan of exchanges as part of our association in IAMAI that we would like to approach the Supreme Court to get this sorted out,” said Sathvik Vishwanath, co-founder & chief executive of Unocoin Technologies, one of the largest cryptocurrency exchanges in the country. “Unocoin will also be a part of it as we believe in being a part of the entire industry rather than just being a single company and we would participate in the case in spite we are not affected by RBI or banks for time being.”