Hey everyone,
Lately, we've been seeing central banks like the RBI in India putting some restrictions on banks when it comes to dealing with crypto exchanges. This doesn’t outright ban cryptocurrencies, but it does mess with how users and exchanges can move crypto around. On a side note, I've been having trouble depositing Rupees into my WazirX account for about a week now. WazirX mentioned it's a problem with their bank, and it got me thinking if this might be because the RBI is cracking down on banks to distance themselves from crypto exchanges. It’s likely this could end up in court, like what happened in 2019. But for now, it seems we might be stuck without being able to send or receive fiat from crypto exchanges. Just my guess, but I wanted to find a workaround for depositing and withdrawing from my exchange if the RBI totally bans banks from dealing with crypto.
So, here’s a simple 3-step method (that’s legal for now) to get your deposits to crypto exchanges:
Step 1: Create an account on OctaFx and deposit funds into it via bank transfer or UPI.
Step 2: When you want to withdraw from OctaFx, choose to withdraw in Bitcoin and use your exchange's Bitcoin deposit address.
Step 3: With the Bitcoin in your exchange, you can do whatever you need to do.
For withdrawals, here’s a 4-step process:
Step 1: After signing up on OctaFx, grab your Bitcoin or Ethereum deposit address.
Step 2: Convert all your crypto into the desired form and withdraw accordingly.
This is a good workaround using another service to prevent any kind of banking restriction however it has its disadvantages such as providing another KYC for another type of platform and as well as other additional fees for processing your withdrawal to a bank and more importantly the service, OctaFX, will definitely see some "unusual activity" from your account since they'll definitely see that you are only using their service as a way of getting your funds around this kind of activity of course if flagged by many services for AML and other monetary compliance. That is why for countries where the crypto industry is hindered by the banks there most preferred method is direct P2P trading just like how Nigeria handles things with their crypto market.
I think a better and relatively safer option could be P2P offered by WazirX. WazirX was the very first exchange to bring this on the table and Indians for almost 2 years during the RBI Ban only used this P2P method for their deposits and withdrawal into cryptocurrencies. Now the best part is that no Bank would know why the transaction was made by the user. Also as it is on the WazirX portal only which ensures that users can do this only if they do KYC which means you are not dealing with any scammer and also the transaction is escrowed by WazirX. I think it's a game-changing feature that has really helped a lot of people in times where crypto is not actually banned but only banks cannot deal with exchanges. If you use OctaFX I am not sure how would you be able to defend the diversion of funds, it might even count as money laundering, I am not quite sure.
That's a great workaround it seems. Might come handy when we need to withdraw or continue trading in overseas account. Because p2p trading might cone with a risk in case banks keep a constant vigil on such transactions. But is Octafx registered in India? If not, from which bank account you will receive your money from.
If you receive too many foreign deposits in your bank account, you might have to face scrutiny from bank or income tax department. So use with caution.
OctaFX does have a subsidiary in India and runs multiple advertisements in India. Though investment in forex is banned in India, you can use OctaFX as a medium of converting your bitcoin/ether into rupees.
However, given that currently RBI has clarified that crypto is not banned in India, this entire issue itself should not arise.