India’s First Bitcoin ATM was Illegal

India’s first Bitcoin ATM, which was launched last week in Bengaluru, has been seized by the police. The Central Crime Branch called the Bitcoin ATM illegal as it was set up without approvals.

The Cyber Crime department of Central Crime Branch (CCB) stated that:

“The ATM kiosk installed by Unocoin in Bengaluru’s Kempfort Mall has not taken any permission from the state government and is dealing in cryptocurrency outside the remit of the law.”

Recently, Cyber Crime Police in Bengaluru has registered a case against cryptocurrency startup Unocoin. According to the case, the Bitcoin ATM was set up despite the Reserve Bank of India’s (RBI) crackdown on cryptocurrencies. Earlier this year, the RBI had ruled a notification- ‘Prohibition on Dealing in Virtual Currencies’. According to the notification financial institutions which are associated with RBI are not allowed to deal in digital assets. The central bank of India also said that cryptocurrencies are not a legal tender.

Harish BV, the co-founder of Unocoin Technologies, who was operating the kiosk, has also been arrested. The Bitcoin ATM was operated at Kemp Fort Mall on Old Airport Road. The Bitcoin kiosk facilitated cryptocurrency deals. The Central Crime Branch has also seized two laptops, a teller machine, a mobile phone, a passport, five debit cards, three credit cards, a cryptocurrency device, and five seals of the company, some other documents, and INR 1.8 lakh. Harish BV was produced before the IACMM court. The court sent Harish to police custody for seven days. The kiosk was a platform for the Bitcoin buyers and sellers. The Bitcoin ATM allowed the users to deposit and withdraw a minimum amount of INR1000. The company was also planning to install similar ATMs in Delhi and Mumbai.

The crime branch said that:

“The accused claims he is running the Kiosk for six months. We think he is misleading us.”

The police requested the general public not to be trapped in the get rich quick schemes.

According to Satvik Viswanath, another co-founder of Unocoin, ‘the business model of the Unocoin abides by the laws and it is perfectly legal for the Indians to buy, sell, and hold Bitcoins and other cryptocurrencies’.