It is being reported that major banks in India have frozen accounts for multiple cryptocurrency exchanges within the country, causing widespread panic among the local cryptocurrency community.
According to local news sources, the decision was taken by the banks when they identified what seemed like suspicious transactions to them. The move also came with the implementation of capped cash withdrawals on the few accounts that remain operational.
The action was implemented throughout multiple banks, including but not limited to the State Bank of India, ICICI Bank, and Axis Bank.
It was further mentioned that the banks had also previously asked for additional information and collateral from the stakeholders of the exchanges in question.
As per reports, the exchanges that had been hit by this move included some of the most significant exchanges within the country such as Zebpay, CoinSecure, BtcxIndia, and Unocoin.
The situation is not that clear at the moment
Local news sources state that the decision to freeze the accounts was taken after due diligence. It was mentioned that the main reason behind this move was the identification that these accounts were being used for reasons other than the ones disclosed at the time of account opening.
Furthermore, it is being reported that the exchanges in question had not been contacted about this decision or the requirements posed for its stakeholders.
Sathvik Vishwanath, Unocoin’s promoter, explained to the press that no one from the banks had contacted Unocoin about the move.
“The banks have not contacted the company or the promoters regarding the actions you have mentioned,” Vishwanath stated.
A local banker also mentioned that the decision to freeze these account was not centralized by the Reserve Bank of India but that the private banks were taking the action as a cautionary measure. He mentioned that the banks were also “wary” of the way that these accounts were operating and conducting their transactions.
This is right after tax notices were issued to cryptocurrency traders
It could very well be a coincidence, but it is prudent to mention that this particular development took place around the same time the Indian government issued tax notices to cryptocurrency traders.
After conducting a detailed yet unusual survey of significant cryptocurrency exchanges last month – some of which are the same exchanges that were impacted with this recent development – the Indian income tax department used the collected data to send tax notices to applicable traders.
According to a senior official from the income tax department, it had been identified that said cryptocurrency traders were not reporting their trading transactions and profits to the government effectively.
Is India going to pose regulations?
India is currently in the process of developing cryptocurrency regulations before it could implement them.
The process initiated both from the government’s growing concern over the increasing cryptocurrency trading and an official ruling from the Supreme Court of India which asked different ministries to start working on developing regulations on cryptocurrencies.
It might also be possible for India to discuss regulations in the G20 Summit that will be conducted in Argentina by the end of this year. However, it is very likely that it will implement some regulations in the next few months.Follow us on Social Media: