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Indian Banks Reportedly Suspend Accounts of Bitcoin Exchanges

© Sputnik / Vladimir Astapkovich / Go to the mediabankA souvenir coin of the bitcoin
A souvenir coin of the bitcoin - Sputnik International
As the accounts of exchanges remain inactive, their customers are unable to deposit or withdraw money by selling the virtual coins they hold, unleashing chaos among investors, according to a news report published by an India daily.

New Delhi (Sputnik) — As cryptocurrency exchanges in India reported a business of over $3.5 billion in the last one month alone, major Indian banks have started suspending the accounts of some of the exchanges, according to a report published by the Indian business daily Economic Times.

The banks that have taken this action include the public enterprises like the State Bank of India (SBI) as well as private banks including Axis Bank, HDFC Bank, ICICI Bank and Yes Bank. Sources told Sputnik that exchanges like Koinex, Zebpay, Unocoin, Coinsecure, BtcxIndi are the ones that have faced the crackdown. 

A few weeks ago, Koinex had issued a statement claiming that "a tussle" between payment service partners and the banks in which it holds accounts has caused an "indefinite delay" in the settlement of a large portion of deposits to Koinex in the past two weeks.'

While none of the banks have officially commented on the development, the Economic Times quoted an anonymous source saying that the move was largely a deterrent for suspicious transactions and the country's central bank had no role in it.  

"The Reserve Bank of India (RBI) has not issued any directive to us — it's a cautionary move on our part. We are wary about the purpose for which some of these current accounts are being used."

Meanwhile, the income tax department has reportedly started sending notices to major investors in cryptocurrencies who mainly comprise real estate dealers and jewelry traders. Cryptocurrency exchanges have taken this with a pinch of salt.

India has not banned cryptocurrencies but the country's central bank and the government have issued several warnings to the public against investing in what they describe as "Ponzi schemes."

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