After the Reserve Bank of India (RBI) in April issued a circular directing banks in the country to stop offering banking services to cryptocurrency-related entities, the Indian financial markets regulator – Securities and Exchange Board of India – started researching the digital assets more effectively. Ahead of the final arguments in the case being heard in the Supreme Court of India, SEBI sent representatives for a study tour to Japan, Switzerland, and the United Kingdom to understand digital assets and initial coin offerings (ICO).

The court case was the result of a petition filed against the RBI circular by the Internet and Mobile Association of India. During the hearing, the court directed SEBI to submit a detailed report on cryptocurrencies. Study tours were conducted with the Financial Services Agency in Japan, the Financial Conduct Authority in the U.K. and the Swiss Financial Market Supervisory Authority in Switzerland.

In its annual report, SEBI said the tours were organized to interact with financial regulators in those countries. The report explains, “SEBI on a regular basis enables study tour of SEBI officials to overseas authorities. These study tours help engage with the international regulators and gain a deeper understanding of the systems and mechanisms.”

SEBI also believes that the knowledge transfer could help improve its existing processes. With a thriving market for cryptocurrencies in India, SEBI needs to understand the mechanisms of ICOs and virtual currencies to formulate adequate regulations. Several crypto-related scams have already come to light in India. One of them was by Amit Bhardwaj, founder of GainBitcoin, a digital cryptocurrency magazine, who reportedly cheated investors out of around 20 billion rupees (about $300 million) through a Ponzi scheme that impacted over 8,000 Bitcoin investors.

Prior to the SEBI study tour, RBI also revealed interest in how other countries deal with digital currencies, and included a mention of regulations in countries like Japan and South Korea in its Annual Report 2017-18.

“Though cryptocurrency may not currently pose systemic risks, its increasing popularity leading to price bubbles raises serious concerns for consumer and investor protection and market integrity,” the report said.

RBI also said the crypto ecosystem could alter the current payments and settlement ecosystem. It explained that since cryptocurrencies are being stored in digital wallets, they could be subject to “hacking and operational risk".

Meanwhile, an Indian crypto exchange, Zebpay, announced Sept. 4 it would return all its users’ money currently deposited at the exchange.

Citing the RBI ban, the exchange said, “We have been distressed at the raw deal crypto-traders are getting in India as a result of the banking problems. ... While it is not possible for us to speak on behalf of our banks, we intend to return your money to you as soon as possible.”

Zebpay began the refund process Sept. 5.

The Supreme Court of India will hear the final arguments Sept. 11 after SEBI and some other regulators submit their responses to the RBI circular.