India’s first Bitcoin ATM opened days back shut down by police, co-founder arrested; here’s why

By: | Published: October 24, 2018 12:53 PM

Just days after Unocoin installed India’s first Bitcoin ATM kiosk in Bengaluru, city’s cyber crime police registered a case against the virtual currency exchange firm, arrested the co-founder (Harish BN) and seized the kiosk.

The Unocoin ATM facility allowed customers to deposit and withdraw a minimum amount of Rs 1,000. Representative Image: PTI

Just days after Unocoin installed India’s first Bitcoin ATM kiosk in Bengaluru, city’s cyber crime police registered a case against the virtual currency exchange firm, arrested the co-founder (Harish BN) and seized the kiosk, said various news reports citing statement of Cyber Crime department of the Central Crime Branch (CCB). The crime department said the ATM kiosk at city’s Kempfort Mall was installed without required permission from the state government. The facility is dealing in virtual currency outside the remit of law, it added.

The Unocoin ATM facility allowed customers to deposit and withdraw a minimum amount of Rs 1,000. The machine doesn’t allow users to use debit or credit cards as banks are not part of the transaction. The ATM was set up despite the Reserve Bank of India’s crackdown on cryptocurrency in India. All the banks and firms regulated by the central bank were asked to terminate relations with any company which deals in virtual currencies from July 6, 2018. The government had also said that cryptocurrencies such as Bitcoin are not a legal tender in the country.

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Unocoin had earlier said that the decision to launch the ATM was taken after the RBI ban in July, which put a virtual ban on trading in cryptocurrencies. “Due to the RBI’s recent notification on ‘Prohibition on Dealing in Virtual Currencies’, our banking relationships were disrupted some time ago,” Unocoin had said. The company was also planning to install similar ATM kiosks in Delhi and Mumbai.

Amid demand for cryptocurrency surging following the depreciation in its currency peso against the US dollar, Argentina had  installed 30 Bitcoin ATMs Even in Argentina a few weeks back. The cryptocurrencies are not backed by the central bank or the government across the world.

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