Bitcoin strangle begins

In what can be seen as an arm twisting strategy, the bank accounts of Bitcoin exchanges operating in India have been made inaccessible to their companies. These accounts belong to leading Bitcoin exchanges including Kionex, Zebpay, Unocoin, CoinSecure and BtcxIndia. 

RBI and the government of India has continuously discouraged citizens from buying or dealing in Bitcoins. The government of India has ruled out the acceptance of Bitcoin as a currency and equated virtual currencies (VCs) to Ponzi schemes. The Reserve Bank of India, the regulator of banks and financial institution, has expressed concerns that using unregulated virtual currencies could threaten the stability of the economy. 

Bank accounts of Bitcoin exchanges in India were suspended on suspicion of dubious transactions by their bankers including HDFC Bank, SBI and Axis Bank, ICICI Bank and Yes Bank, said news reports. This comes after news reports that the Income Tax department has sent notices to individuals trading in cryptocurrencies, clearly indicating the unease felt by the government agencies over the rising popularity of VCs.

'Crypto Mining help' tweeted that some Indian banks have issues with blockchain technology and are mistreating their customers. The tweet referred to HDFC Bank and Koinex. Kionex is a multi-cryptocurrency exchange operating from India. Koinex said in a blog that some of its users making Indian Rupee withdrawals from its exchange were facing difficulties due to a indifferences between the company's payment service partner and its bank. This was causing delays in the settlement of deposits made to Koinex, in January.

Some estimates suggest that 10 per cent of all Bitcoin transactions happen in India and that Indian are more optimistic about the future of vitrual currencies than any others.