Golix’s Bank Accounts Still Closed Despite Court Order

Golix’s bank accounts remain closed even after the high court temporarily lifted a directive by Zimbabwe’s central bank banning cryptocurrency trading.

Trading remains suspended and the cryptocurrency exchange is now advising users not to make any further deposits to their accounts.

“If you try to deposit funds to our bank accounts right now, it may take weeks before we are able to recover those funds because unless we tell the bank in advance, those funds will go straight to a suspense account,” the company said in an emailed statement to its customers.

Users have now been asked to withdraw their funds befeore Wednesday for processing on Friday.

The interim relief by the high court does not guarantee that Golix will get back its bank accounts, the firm says.

The company is now talking with the banks to have customer deposits refunded to their owners. Withdrawals are now being processed manually. “Because the bank would like to limit the activity on the accounts, we cannot be able to process withdrawals as often as we used to,” the company said.

All bank accounts belonging to Golix were closed on May 18.

Cryptocurrencies have gained traction in the South African nation which has been facing an economic crisis and hyperinflation. People started turning to cryptocurrencies as a more stable alternative despite the high volatility. Cryptocurrencies are typically used for remittances and even buying cars.

Golix is now urging users who get automated deposits from services such as “mining pools or BeForward” to work out on how to stop the transactions.

The firm is also urging users to move their cryptocurrency holdings from Golix to other wallets. The withdrawals will be processed manually from cold wallets.

Sequence of Events

The Reserve Bank of Zimbabwe issued a directive on May 11 instructing banks to close accounts belonging to cryptocurrency exchanges.

The central bank cited fears over the possible use of cryptocurrencies for money laundering while issuing the ban.

On May 17, Golix says it received a letter dated May 15 instructing the firm to cease all operations.

Golix complied but went to court immediately thereafter seeking to have the directive quashed. On May 21, the high court granted a temporary relief to Golix after the respondents, RBZ and the governor failed to appear in court.

In its application, Golix had argued that the RBZ had usurped the powers of the legislature by outlawing its operations.

“The Respondents are in fact purporting to classify the trade in cryptocurrency as illegal,” Golix argued.

The case goes on.