India’s first bitcoin ATM ends badly

Posted: 24 October 2018 4:46 pm
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The candle that burns twice as bright burns half as long.

India's government officials have enjoyed a tense relationship with cryptocurrency to date, for a given value of enjoyment.

On the whole, its stance towards cryptocurrency might be summarised as "no", while the stance of India's emerging blockchain industry might be summarised as "maybe".

This has led to frictions, such as followed the installation of India's first bitcoin ATM machine in Bangalore, by Indian crypto firm Unocoin. First these frictions were in the form of a lot of polarising press coverage and debate following its installation, and second they were in the form of an arrest.

Despite an insistence that it was within the law, and despite the machine apparently not working properly, Unocoin CEO Harish BV was arrested by the regional Cyber Crimes police force and had a number of possessions seized.

In a statement on Twitter, Unocoin concedes that the installation of the bitcoin ATM "didn't go well".

It didn't go well

Harish was arrested a week after installation, The News Minute reports, during which police seized two laptops, one mobile phone, three credit cards, five debit cards, his passport, five company seals and a "cryptocurrency device" which probably refers to a hardware wallet.

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In a statement to the media, the police explained:

"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."

However, Unocoin insists that it's perfectly legal – or at least that it thought it was – explaining that the ATM simply let people withdraw and deposit bitcoin rather than buy or sell them, saying it was employing "newer mechanisms and solutions to reduce the hurdle facing (regulatory) hurdles by the present central governments stand" (sic).

While the explanation (withdraw and deposit bitcoin only) makes it sound like essentially a very heavy shared hardware wallet, there is a video showing someone using the Unocoin bitcoin ATM to withdraw cash, so it's probably more than just that.

Either way, it shows that India's authorities seem determined to push back against cryptocurrencies where they do crop up in unwanted ways, and don't seem too inclined to cave to convoluted technicalities.

Disclosure: At the time of writing the author holds ETH, IOTA, ICX, VET, XLM, BTC, ADA

Disclaimer: This information should not be interpreted as an endorsement of cryptocurrency or any specific provider, service or offering. It is not a recommendation to trade. Cryptocurrencies are speculative, complex and involve significant risks – they are highly volatile and sensitive to secondary activity. Performance is unpredictable and past performance is no guarantee of future performance. Consider your own circumstances, and obtain your own advice, before relying on this information. You should also verify the nature of any product or service (including its legal status and relevant regulatory requirements) and consult the relevant Regulators' websites before making any decision. Finder, or the author, may have holdings in the cryptocurrencies discussed.

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