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Looking at the recent surge in crypto prices, many industries are taking note. The journey has not been smooth for most operators, but there is light at the end of the tunnel. Cryptocurrency is now regarded as the future of trading across many sectors, and the casino industry is leading the way. More than ever, crypto gambling is gaining traction.
Five years ago, bitcoin’s price rose from $1,000 to nearly $20,000. ZebPay, under Sandeep Goenka, Mahin Gupta, and Saurabh Agarwal, was then India’s biggest cryptocurrency exchange. When the value of bitcoin crashed at the beginning of 2018, and RBI banned all crypto payments, it was not business as usual for ZebPay. They shifted their business to Australia and Malta, but even crypto-to-crypto trading didn’t help much.
The proprietors of ZebPay then sold their company to Rahul Pagidipati, a US lawyer of Indian origin. Interestingly, Pagidipati was in no way a cryptocurrency professional. He had not worked in any crypto-related business before. He is not a software engineer or an IT pro, but a man who had lived most of his life in his family office and running health insurance companies. His interesting story alerted several media outlets across the US and around the world, and below are some of the excerpts from his interview.
Pagidipati was born in the US to Indian parents and has spent most of his life in the US. His parents are doctors, so much of his adult life majors on investing in healthcare businesses. He is a professional lawyer and has an MBA degree from North Western University.
“I first came to India to start a business in 1999, during the dot com boom. I launched an insurance claims processing company for US insurers called Anion Healthcare Services. I later sold this company but continued to invest in healthcare-related businesses for my family office – Ayon Capital. This is essentially my own family’s money and we do not raise money from outsiders. I read Satoshi Nakamoto’s whitepaper on bitcoin in 2011 and I was blown away,” said Pagidipati.
“At the time the price of bitcoin had gone from $1 to $10 and then dropped back to $3. It got me thinking about how to use blockchain for health insurance and I got more interested in cryptocurrencies in general.”
“In 2018, ZebPay had shifted base to Australia and Malta from India, after the RBI ban and reoriented itself towards crypto-to-crypto trading rather than rupee-crypto. I acquired a minority stake in the company in that year and gradually got more and more involved in its operations. The company was losing money all the time, around half-a-million US dollars a month.
In late 2019 I decided to acquire full control and staked almost my entire net worth for this. My family thought I was crazy! It so happened that just two weeks after my purchase, Finance announced the acquisition of WazirX, another Indian cryptocurrency exchange. Keeping the company intact was tough but I persuaded most of my middle management to stay on, despite the RBI ban. Three months after my acquisition, the Supreme Court of India quashed the RBI ban and ZebPay took off.”
Probability of a bubble in bitcoin?
When asked if there was a bubble in bitcoin, Pagidipati was quick to brush it off. “Absolutely not. The market is reasonably efficient when it comes to cryptocurrencies also. I think there are two fundamental reasons why the price has to go up. First, a large section of bitcoin users typically are holders. This constricts the supply. Second, good money tends to displace less good money. Bitcoin and cryptocurrency in general are technologically better than fiat currencies like the dollar and rupee. They will naturally displace the latter. I’m personally bullish on Ethereum though.”
“For nearly two years, I used to buy one ether per day and I will resume this soon. I have most of my crypto net worth in ether actually. Bitcoin is a store of value but Ethereum opens up so many possibilities through smart contracts.”
Charges for ZebPay users
According to Pagidipati, the charges for ZebPay users are quite minimal. “For a transaction on the exchange platform, we charge an average of 0.2%. If you want to move money out of the exchange into a cold wallet, of course transaction fees will apply. This charge is the same for all cryptocurrencies traded on ZebPay. We have a monthly membership fee of 0.0001 bitcoin which is waived as long as you do one trade that month.”
Pagidipati’s take on India’s crypto regulation
“There are broadly three types of cryptocurrencies. First, utility tokens like Ethereum and BAT should be regulated as digital assets. Kind of like domain names. This should be done by some type of commodities regulator. Second, security tokens should be regulated as securities by a market regulator. Finally, stable coins should be regulated by the central bank. The central bank should require issuers of stable coins to maintain equivalent fiat currencies in reserve. There should of course be regulation, especially for consumer grievances.”