Zebpay shut India's largest crypto exchange overnight, blaming the RBI's banking ban

Operated India's oldest cryptocurrency exchange, and arguably its largest, with a user base of about 3 million.

That with bank accounts choked, running a compliant crypto exchange in India was no longer possible — and that shutting down beat operating in the grey.

Zebpay built India's leading cryptocurrency exchange as local trading boomed; by 2018 it claimed a 3-million-strong user base and the industry's oldest brand.

On 5 April 2018 the Reserve Bank of India banned banks from dealing with cryptocurrency exchanges. On 28 September Zebpay emailed its 3 million users that its exchange business would stop that same day: 'The curb on bank accounts has crippled our, and our customer's, ability to transact business meaningfully. At this point, we are unable to find a reasonable way to conduct the cryptocurrency exchange business.'

The exchange business shut on 28 September 2018. The Ken's editors argued the RBI was 'far from the only reason', noting Zebpay had been expected to stay afloat much longer given its leadership position — 'everyone feels that Zebpay threw in the towel too soon but no one is too sure why'.

The RBI circular cut off bank accounts, the exchange's core ability to move customer money.

Zebpay framed the exit as forced: it could find 'no reasonable way to conduct the cryptocurrency exchange business'.

The Ken reported the industry's view that leadership should have bought Zebpay more staying power than it used.

The same-day shutdown timing, announced by email, left even industry insiders unsure what else drove it.

When regulation severs your payment rails, the shutdown decision becomes a race between runway and hope; market leadership is an argument for waiting, not an exemption from the ban.

As of 12 October 2018, the exchange was shut and the Indian crypto industry was absorbing both the RBI ban and Zebpay's exit, with The Ken questioning whether regulatory scapegoating told the whole story.