Hi Everyone,
Recently we have seen a trend of central bank such as RBI in India imposing restrictions on Banks from dealing with cryptocurrency exchanges. While this restriction in itself does not ban cryptocurrencies, it stops the free flow of crypto by users and exchanges. On a separate note, I have been facing issues in depositing Rupees into my WazirX account from a week. Since WazirX has tweeted that this issue is arising due to some issue with their Bank, it makes me wonder if this is due to RBI being a bit strict with banks in order to cut ties with crypto exchanges. In this regard, it is likely that this action would be challenged in the courts similar to 2019. But until then you may not be able to transfer or receive funds from crypto exchanges in fiat currency. While this is my hypothesis, I was keen to explore an alternative to deposit to/withdraw from my exchange if RBI completely bans any bank from dealing with crypto exchanges. Accordingly, I have jotted down a simple 3 step process (which is currently legal) that you could use to route your deposit to crypto exchanges.
- Step 1: Sign up on OctaFx and deposit money into OctaFX account through bank transfer or UPI payment.
- Step 2: In the withdraw option of OctaFx use the option — withdraw in Bitcoin and use your exchange’s Bitcoin deposit address.
- Step 3: Using Bitcoin deposited into your exchange, transact as per your requirement.
Similarly a 4-step process for withdrawals is as follows:
- Step 1: Once you have signed up on OctaFx, find your deposit Bitcoin/Ethereum address for your account.
- Step 2: Convert all your exchange holdings to Bitcoin or Ethereum. I would prefer Bitcoin since it has highest currency pairs.
- Step 3: Choose the option to withdraw Bitcoin/Ethereum and input your OctaFX Bitcoin/Ethereum address.
- Step 4: The Bitcoin/Ethereum deposited into your OctaFx will be automatically converted to Fiat (USD) and you can then withdraw into your local bank account.
Further do consider the following notes:
- Currently the above option is legal i.e. it is not banned. However, ensure your transactions are from legal source of funds, appropriately taxes and follows other legal requirements
- While you are using OctaFx, kindly note that trading in foreign exchange is banned in many countries including India (Yes, this is something of a legal grey area). Therefore, as long as you use the funds only for depositing/withdrawing crypto to/from crypto exchanges, it should be alright.
- If cryptocurrencies are banned by your country even the above method would be illegal, and hence do not follow this in such case. I have separately discussed on legal grounds to challenge the ban on cryptocurrencies in this thread: https://ukproductreviewer.medium.com/how-to-win-a-writ-petition-against-ban-on-crypto-7f0de020493
- The exchanges and OctaFx will likely charge a small portion of deposit/withdrawals as fees. Please consider this before undertaking any transaction.
Trust you will find this post useful. Please feel free to share any other ideas that you have, which I can incorporate into the post, so that this can serve as a comprehensive guide for everyone.
