On April 5, the Reserve Bank of India had passed a circular instructing all Indian banks to wind up their business activities with cryptocurrency exchanges.
Not happy with the order, cryptocurrency exchanges based out of India or having India-based clients filed a petition in various courts across the country citing the move as ‘unconstitutional’ and demanded the courts to revoke the petition.
A couple of weeks ago, the Supreme Court directed all exchanges to file petitions only with the apex court and no other court. In the same hearing, it also said, it would pass the judgement on July 20, which will be 15 days after the date RBI had given Indian banks to terminate all business relationships with these exchanges.
Now as the date for the hearing approaches, a remarkable change in exchanges is being observed. Earlier, they were full of righteous anger but as the days go by, they have taken to cajoling and pleading with the central bank.
This change can be observed due to Supreme’s Court suggestion that the exchanges can try engaging with the central bank. As a representative from one exchange told news portal Quartz, “We already follow the strict know-your-customer (KYC) and anti-money laundering (AML) guidelines and we have detailed that out in the application (to the RBI). Plus, we have also suggested measures that we are ready to take to improve the KYC-AML norms, such as including passport details as well. We are also ready to take any suggestion that the regulator has to offer that can address their concerns.”
The exchanges are asking the central bank to not impose a blanket ban and instead penalise firms that are violating the norms.
They have also put forward other suggestions such as adopting international best practices, including allowing financial products such as cryptocurrency insurance. The representative added, “These are to be taken up by the exchange and adds a layer of surety and customer protection in case of any mishap. All this can happen only if we come under a regulatory purview.”
Kali Digital Eco-systems Private Limited, which was one of the first petitioners to drag the RBI to court said, “Considering the next date of the hearing in the supreme court is after July 06, 2018, KDEPL (Kali Digital Eco-systems Private Limited) requests your good office (RBI) to extend the time of three months granted in the captioned circular to at least Aug. 31, 2018.”