India’s Supreme Court Moves Forward With Cryptocurrency Ban, Banking Services Denied To Crypto Companies

  • The Supreme Court of India now supports the reserve bank’s decision to terminate banking relationships with local cryptocurrency exchanges.
  • Rashmi Deshpande, Indian lawyer representing a local exchange, says “this is a win for the [reserve bank] and a big blow” to crypto-related businesses.

The Supreme Court of India recently announced that it will not be providing any type of relief to cryptocurrency exchanges from the restrictions placed on them by the Reserve Bank of India (RBI). On April 5th, the RBI had ordered all local financial institutions to bring their banking relationships with crypto related businesses to an end within a 3-month time period. The reserve bank’s official ban on cryptocurrency exchanges will reportedly be effective on July 6th, 2018.

In an attempt to fight the central bank’s crypto ban, several digital currency exchanges took the matter to India’s Supreme Court in April. The court then scheduled the next hearing date for July 20th, which is exactly two weeks after the crypto ban was expected to become effective. However, the Internet and Mobile Association of India (IAMAI), which includes local cryptocurrency exchanges among its members, asked the court for an additional hearing on an earlier date, which was conducted on July 3rd.

“A Big Blow” To Crypto Firms

Rashmi Deshpande, a lawyer representing Kali Digital Eco-Systems, a crypto exchange set to launch some time this year, stated, “This a win for the RBI and a big blow to virtual currency exchanges and traders. In our earlier request to the RBI as well, we had asked it to extend the deadline by a month after the July 20 hearing.” Deshpande added that since it has now been decided to move forward with the ban, crypto traders and businesses will not be able to access the nation’s banking services.

In a previous May 17th hearing conducted by the apex court, the exchanges had been requested to file their issues and complaints against the RBI. The companies operating the exchanges had also notably been in close communication with the central bank during the last few days of May and early June. Nischal Shetty, the CEO of local crypto exchange WazirX, noted that his company had tried to explain to the RBI how blockchain technology works by submitting “a detailed presentation that could have given [the bank] a clearer picture on what is blockchain, [and] how the exchanges work.” However, Shetty says he never got any response from the RBI.

Cryptocurrency Regulations Draft Almost Finalized

Moreover, during the July 3rd hearing, the supreme court ordered the reserve bank to address the issues raised by the crypto companies within a week from the end of the hearing. At present, the Indian government is reportedly almost ready to submit its first draft on proposed cryptocurrency regulations.

Subhash Chandra Garg, India’s Economic Affairs Secretary, said that the drafted regulations specify “which parts of [these crypto] businesses should be banned and what should be preserved.” He also stated that discussions pertaining to the drafted regulations would take place and be brought to an end by “the first fortnight of July.”

BitMEX Ventures Invests in a Philippines-Based Cryptocurrency Exchange

Siamak Masnavi

BitMEX Ventures, the investment arm of crypto derivatives exchange BitMEX, which is owned and operated by Seychelles-based HDR Global Trading Limited, has invested in a cryptocurrency exchange called PDAX that is based in the Philippines.

The Republic of the Philippines (or "The Philippines" for short) is an archipelagic country in Southeast Asia with a population of around one hundred million. PDAX, which stands for Philippine Digital Asset Exchange, was founded in 2018 by people with experience from "MIT, Goldman Sachs, HSBC, and the United Nations SDG Initiative." According to PDAX, it is a full regulated centralized crypto exchange that has been approved by the central bank of the county, Bangko Sentral ng Pilipinas (BSP). PDAX says that over half of the people in the Philippines do not have bank accounts and even the ones who do "have limited access to investments."

PDAX is currently operating in beta mode, and there is a waitlist for people who gain access to this trading platform. Here is what the interface looks like:

PDAX Interface.jpg

Earlier today, PDAX announced on its Medium blog that it has partnered with BitMEX Ventures. This investment (the amount has not been disclosed) from BitMEX Ventures should help PDAX with the official launch of its platform. Furthermore, it says that it hopes to "create a digital financial market, not just for cryptocurrencies but all kinds of digital investment products and securities." Examples are commodities, real estate equities, and debt securities in token form.

According to a report in BlockTribune, Nichel Gaba, co-founder and CEO of PDAX, had this to say:

“Through digital assets and blockchain, we want to even the playing field to give every Filipino from all walks of life the ability to grow their hard-earned wealth. With the support of BitMEX and by leveraging blockchain technology, we hope to create a digital financial market that is accessible to everyone.”

As for Arthur Hayes, Co-Founder and CEO at BitMEX, BlockTribune's report quotes him as saying:

“We see a substantial amount of trading volume from users in the Philippines and want to further empower traders with an affordable and seamless bitcoin transfer platform without the previous charges that made financial transactions so cumbersome. We are confident in the transformative potential of cryptocurrency and PDAX’s ability to widen access to the Philippines market and provide the tools to learn more about financial markets."

Over on Twitter, he sent out a tweet to welcome PDAX to "the BitMEX sphere of influence."

Featured Screenshot Image via PDAX