Nick Chong · 1 day ago · 2 min read · Insights via Grayscale Investments
Only a week after India’s first Bitcoin ATM was launched to much fanfare, regional authorities have confiscated the two-way crypto machine and arrested the initiative’s founder, reported Times of India on Oct. 24.
Bitcoin ATM Seized
The Bitcoin ATM was installed by cryptocurrency exchange Unocoin in a shopping mall in the city of Bengaluru, India’s self-styled “Silicon Valley.” While the plan was to circumvent a banking ban placed on cryptocurrencies in the country, authorities considered the move a violation of regulations and declared the machine as “illegal.”
The co-founder of Unocoin, 37-year-old Harish BN, was arrested on Oct. 23 in Bengaluru and also faces charges of illegal installments in public locations. Interestingly, the ATM was set up despite an infamous crackdown on all crypto-related activities by the Reserve Bank of India (RBI).
In a statement, the Cyber Crime department stated:
“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.”
Apart from the ATM, authorities seized several items in possession of Harish, including two laptops, three credit cards, five debit cards, one mobile, five company seals, one passport, a “cryptocurrency device,” and a little under the Indian currency equivalent of $2,500 in cash. He was later taken into police custody.
Placed to Circumvent Laws
As reported by Cryptoslate, the Unocoin ATM was installed earlier this month and allowed verified customers to deposit and withdraw crypto/fiat with a minimum amount of approximately $14.
The machine was marketed as India’s first such initiative, despite strict directives – or the lack thereof – about developments pertaining to cryptocurrencies in the nation.
However, regional media reports about the machine’s illegitimacy led the founders to shift the kiosk to another location, as controversy stirred up in the local sentiment criticizing both the company and management of Kempfort Mall.
In an earlier statement, Unocoin noted all RBI regulations were complied with and the ATM was introduced to accommodate “newer solutions” and mechanisms to reduce the hurdle that cryptocurrency businesses are facing in the country.
Meanwhile, Unocoin co-founder Sathvik Viswanath continues to defend his business model:
“We got a lot of bad press after the finance minister announced a ban in February 2018. The minister’s statement was clear: Cryptocurrencies are not legal tender in India. He did not say ‘illegal tender.’ That’s a huge difference.”