Is ‘Zebpay’ Manipulating The Market For Its Own Personal Gains

By Khushboo Chadda

“India’s biggest crypto exchange- Zebpay, is leveraging upon its current leadership in the market (by volume). The carefully orchestrated manipulation of the crypto market has disrupted the entire ecosystem at large.”

Over the course of the last few days, Zebpay has been floating mails to its user base probing them about how insecure and unsafe transactions have become after the regulations of the RBI have been levied upon. Zebpay has spun a yarn that’s caught the Indian market with great intensity. We might even be looking at this year’s biggest manipulation trend left unchecked by industry regulators like SEBI, CCI, RBI etc. According to the market statistics, bitcoins prices have stooped to an all-time low. It is suspected that Zebpay has created a haste and panic environment and has tried to pull profits their way in the wake of the confusion. A direct example of this is how the prices have moved differently on Koinex and Zebpay, respectively.

The case that we’re discussing seems to be a part of a well planned motive, that began as way back as in May 2017. At this time, the base price of bitcoin was set at a difference of almost INR 100,000/- compared to the actual market price. Here, to Zebpay’s advantage, they were already enjoying a grand user base in a large market like India where crypto investors were drawn to the platform by its simplicity and easy-to-use user interface. Such a user base is enough to make an impact in the international crypto market if carefully manipulated. Additionally, their tie-ups with banks made transactions and currency exchange further more hassle free for users and in all likelihood, only added to their monopoly. This is where the start of Zebpay’s plan can be traced back to.

Providing a service and leading in the market through sincere hard work is different from leveraging the lack of competition right under the nose of bodies like the Competition Commission of India. Unfortunately, these activities by Zebpay went unchecked by esteemed government authorities like SEBI. The cause of this was that these bodies were still trying to figure out ways to set regulatory guidelines with respect to their international counterparts. In the midst of all this indecision, the RBI issued a notice to warn the investors about the volatility of this market, the risks involved and even discouraged banks from indulging in this process. In an effort to keep a check on the illegal usage of cryptocurrencies like money laundering, etc. the RBI granted the banks a period of 3 months to clear all pending transactions. However, Zebpay was successful in twisting the language of this regulation and served it to their user base as a panic stricken situation. It is highly likely that Zebpay saw this as an opportunity to continue its horseplay for yet another monopoly, and that could explain how their mailers and push notifications were well received by millions of its users.

The subject of the first mail received by users said: Zebpay Announcement: Your Rupee Withdrawls Could Stop. The mail begins with an intention to warn users indirectly, saying: “As a responsible corporation, we regard customer-protection and market-integrity as our primary objectives. In light of that, please note that if Zebpay bank accounts are disrupted, rupee deposits and withdrawals will become impossible.

However, the corporation did not refrain from encouraging their user base to trade on their platform and simply made a wordplay out of RBI’s regulation to its advantage. This allowed them to smartly promote withdrawals within their platform. In the words of Zebpay:Of course, since our bank accounts are functional at the time writing this announcement, you are welcome to place a withdrawal request for your rupee balance. If you do that, we will endeavor to return your rupee balance to your bank account as soon as possible, so long as our banks support such withdrawal.

On analysing their mail trails, it could be deduced how these mails were aimed at shaking the confidence of inexperienced investors. Furthermore, the mail by Zebpay has a section towards the end where Zebpay encourages its investors to make use of the opportunity and trade as quick as possible, before they cease bank transactions. To demystify things more, let’s take a look at the mails and notifications received by investors on June 21(between 2:30 pm and 11 pm), and its reflecting results on the market.



2:32 PM IST: First mail delivered
Market rates were at 4,31,000 INR on Zebpay

2:45 PM IST: Second mail delivered
As a result of the confusion, market rates were down to 3,80,000 INR on Zebpay

3:00 PM IST: Third mail delivered
Market rates further dropped to 3,57,000 INR on Zebpay

3:15 PM IST: Fourth mail delivered
This helps the Spread rise to 17,000 per trade on Zebpay

10:02 PM IST: Received push notification for FAQ regarding mails
11:00 PM IST: Received push notification for FAQ regarding mails

While Zebpay must be appreciated for their exceptional scheme, it still does not justify playing the market and the ecosystem for something that easily qualifies as selfishness. Having been crowned the most trusted and credible Bitcoin exchange, a scheme like this can surely hurt the sentiments of even the the most loyal users of the platform. What’s more disheartening to grasp is that Zebpay has been step one for any amateur who has ventured into the ambit of cryptocurrency in India. Hence, the news might come as a shock to most users of the platform.

Be that as it may, there is nothing to be said with absolute surety as of now. We may only deduce what we can from available proofs and acute observations. The team of BTC Wires sincerely hopes that the masses do not have to suffer due to the individual profits of any one entity.

Khushboo Chadda

Khushboo Chadha is a passionate blockchain enthusiast who firmly believes in the extraordinary potential of the technology.

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