Unocoin, a trading platform in India, has reportedly been at the center of an intensifying debate in India over the legality and regulation of Bitcoin. The trading platform portends to be India’s Bitcoin Exchange, and has shut down once before due to uncertainties over Bitcoin in the country.
According to a BitcoinTalk Bitcoin Forum Hero Member, Dashingriddler (OP), who claims to be affiliated with the Unocoin team, the company’s directors were asked to visit their local authorities this week. As OP writes,
The officer is bothered about bitcoins coming to India bypassing the regulated route and those bitcoins being exchanged for INR in India using [services] like Unocoin.
As Unocoin learned in the first day of meetings, the Indian had questions not only about their services, but about Bitcoin in general. According to Unocoin, the authorities “had the idea of transaction volumes on Unocoin and this officer we are talking to know a LOT about Bitcoin technically.” The meeting with the official on Wednesday continued through Thursday.
Throughout the BitcoinTalk thread, the OP clarifies exactly what has been discussed in the meetings:
“The question [goes] back to - “Where exactly can I see what you are doing is legal in India and you are not violating any regulation?” According to OP, it seems the officer is arguing that, “if Bitcoin is not declared legal, then even face to face transactions would [be deemed] illegal.”
Although OP could not disclose which authority he was speaking with, he did note that the authorities had some questions regarding a particular customer of Unocoin, whose information was not requested. The poster describes the main issue of the meetings:
The issue we are trying to address is, how can an external official figure out from where the bitcoins (funds) are coming from without really questioning the person who got the bitcoins. They can do this with all regulated channels but not with bitcoins.
There are certain points the OP and the official agree on:
In the conversations about Bitcoin, when I mention bitcoins are not illegal - I am not getting confronted...When I say there are no regulations for bitcoin in India as of now - I am not getting confronted.
OP clarifies: “The officers are agreeing with me when I say these.”
It appears that the officials in question recognize that the Bitcoin technology has brought up new regulatory issues for them to consider and are questioning users to identify how to regulate Bitcoin. An obvious answer to this, as industrialized nations have noticed, is to merely regulate Bitcoin businesses, in particular exchanges.
The drama comes less than six months after an Indian Reserve Bank Governor claimed that "Bitcoin is fascinating."