India, the worlds largest democracy and second most populous country in the world, doesn’t seem too comfortable with cryptocurrencies and hence has been delaying commenting on the regulation around it. But this silence from the regulators has been creating a lot of confusion which is now making the industry crumble under pressure.
Illegality, arrests and shutdown: The words that Indian crypto industry is being associated with
The Indian regulatory corridor has been abuzz with the cryptocurrency as the Apex court in India has finally asked the Union of India to file a counter affidavit on cryptocurrency regulation. While the matter still is pending in the courts, the police and various regulatory authorities have gone ahead and acted against various crypto businesses calling cryptocurrencies illegal.
The latest victim to this is Unocoin, the company which, a few days back, set up India’s first Bitcoin ATM. The latest update on the same is that another co-founder of India’s oldest cryptocurrency exchange Unocoin was reportedly arrested. This news comes after the company saw its first Bitcoin ATM being seized by the Cyber Crime Department of the Central Crime Branch (CCB) and other co-founder being arrested.
The merit for the CCB’s actions was that the ATM kiosk was installed in the city of Bengaluru without the permission of the state government.
At the time, the other co-founder of the company, Sathvik Vishwanath, noted:
“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”. There’s a huge difference. It means you bear the risk of your investment and there’s no regulation for the industry”
India’s media outlet News 18 reported that Viswanath has also been arrested on charges of collusion. Citing a police officer, the media outlines:
“The accused in order to earn money had joined hands with the other accused and set up these kiosks illegally, thereby duping the public.”
While this being with Unocoin, India’s Association of Information Technology, Nasscom has also been quoted by media terming cryptocurrencies as illegal. Another media outlet Business Line reported, Nasscom president Debjani Ghosh saying cryptocurrencies were illegal and asked players to obey the law and seek clarification from the government if they are unhappy with it. Ghosh said from Nasscom perspective, it was very clear that cryptocurrencies were illegal.
“It is law of the land and hence, we have to work with it. If we do not agree, we have to go back to the government and speak about why cryptocurrencies aren’t correct,” she said.
While the decision of the Apex court of India is still pending, the actions of the police and comments of the regulatory and business bodies look unfair. Maybe this tiffs will compel the government and the Apex court to come with a regulation on cryptocurrencies in on of the biggest market called India.
Will The Apex court of India decide in favour of crypto business? Do let us know your views on the same.
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Nilesh Maurya has been associated for past 8 years as an Investment Banker with Omega Capital, a bespoke Investment Banking outfit having offices in Mumbai, New York, Singapore, and Dubai. He has been a regular contributor to business publications such as Business India and Market Express and has been a mentor to many start-up companies. Nilesh Maurya has been associated for past 8 years as an Investment Banker with Omega Capital, a bespoke Investment Banking outfit having offices in Mumbai, New York, Singapore, and Dubai. He has been a regular contributor to business publications such as Business India and Market Express and has been a mentor to many start-up companies. Follow him on Twitter at @KoinKing1 or connect with me on linkedin.