The first Bitcoin ATM in India was revealed by Unocoin on 14 October 2018, despite the Reserve Bank Of India’s crackdown on Bitcoin. A mere 10 days later Indian police have raided the ATM, seizing the machine, 2 laptops, a mobile phone, 3 credit cards, 5 debit cards, a passport, 5 seals of the Unocoin company, USD 2,500 of Indian Rupees (INR), and they have arrested the Co-Founder and Chief Technology Officer of Unocoin Harish BV. Indian police have stated that more arrests are likely.
Although cryptocurrency firms are banned from having bank accounts in India, and cryptocurrency has been declared not to be legal tender, it did not appear that there was anything illegal about operating a Bitcoin ATM. This is because a Bitcoin ATM that offers both buying and selling does not need a bank account since people who buy Bitcoin insert cash into the ATM, and people who sell Bitcoin withdraw cash from the ATM.
However, Indian police clearly disagree. A commissioner for the Bangalore Police, Alok Kumar, says “They [Unocoin] did not have any license from RBI, SEBI [Securities and Exchange Board of India] or any other agency to carry out the bitcoin transaction. They were running it without obtaining any trade license from the BBMP [Bangalore government]”. Police further warned citizens not to be enticed by the potential to make money by investing in crypto.
The CEO and Co-Founder of Unocoin, Sathvik Viswanath, rebukes the police saying “cryptocurrencies are not legal tender in India. He did not say ‘illegal tender’. There’s a huge difference. It means you bear the risk of your investment and there’s no regulation for the industry”. Therefore, Viswanath asserts that Indians can buy, sell, and own Bitcoin, and there is nothing wrong with a Bitcoin ATM.
There probably will not be Bitcoin ATMs in India for the foreseeable future due to this raid, which is unfortunate since Bitcoin ATMs are a burgeoning and proliferating business worldwide. There are currently 3,905 Bitcoin ATMs in the world and that number has been exponentially growing.
That being said, peer to peer Bitcoin and crypto trading is legal in India and has been flourishing, so there is no lack of crypto in India.
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