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.”

Canadian Bitcoin Trader Reveals He Lost $75,000 With QuadrigaCX's Collapse

  • Canadian trader reportedly lost almost $75,000 trading bitcoin on QuadrigaCX.
  • QuadrigaCX is a Canada-based crypto exchange that went down after experiencing numerous internal problems - which were made worse by the unexpected death of its founder.

A Canadian cryptocurrency trader who previously traded on the troubled cryptocurrency exchange, QuadrigaCX has revealed he lost $75,000 after the trading platform began experiencing numerous problems.

As crypto enthusiasts know, QuadrigaCX’s founder and CEO, Gerald Cotten, reportedly passed away on a trip to India and what appears to have made matters worse is he was initially thought to have sole access to the crypto trading platform's cold wallets, which held over $145 million worth of client funds.

Cold Storage Wallets Reportedly Empty Since April 2018

For several weeks, there were reports of many attempts being made to recover the large amount of funds. However, QuadrigaCX’s auditor reported earlier this month most of the exchange’s cold storage wallets were reportedly empty since April 2018.

In a recent report published by MarketWatch, Bill Tsao, a Toronto, Canada-based digital asset trader, revealed he lost $75,000 after he made the mistake of conducting a “mis-timed” transaction. The trader also claims he entered a bid price that was “probably too good to be true.” He remarked: 

I needed the cash so I just looked for the best price and thought this is the best place to sell. It was just over one hundred thousand [Canadian] dollars (appr. $74,800 USD) to pay down some mortgage and cover some other personal items.

Site Goes Down Right After Trader Conducts Large Transaction

Tsao noted he executed his sale order on January 28, 2019, which was right before the QuadrigaCX website went down - and remained offline thereafter. As detailed by MarketWatch, Tsao reportedly sold his bitcoins (BTC) just before 2 AM Eastern Standard Time (EST) on that day. This, according to data from block explorer site,

Although QuadrigaCX’s management posted an update claiming the exchange was performing “routine maintenance,” the trading platform never became operational again. Instead, reports detailing the untimely death of Gerald Cotton, the founder of QuadrigaCX, started surfacing.

Regretting Trading On QuadrigaCX

While Tsao admits he lost millions of dollars trading bitcoin, the trader says he regrets conducting that one particular bitcoin transaction on QuadrigaCX the most. He noted:

Right now, I can’t do anything until the investigation is over. I have sent emails, filled out tickets but I have got nothing back.

Going on to mention that there was an obvious red flag as bitcoin had reportedly been trading at a $600 premium on QuadrigaCX (at the time he conducted his transaction), he confessed:

All I wanted was the best price. I felt so stupid not really looking into the site further before I [did] that.