Last week police of Indian city of Bangalore arrested the co-founders of Unocoin for illegally operating a Bitcoin ATM kiosk. One of their co-founders, Sathvik Vishwanath gave a recount of his experience to Quartz India.
The arrest was mostly seen as the Indian government making an example out of a crypto entity so that other entrepreneurs stay far away from it. Not only that it is sending the public a message that running crypto operations in the country is bad enough to get you arrested.
Just a week after Unocoin had installed the ATM, Harish BV, one of the co-founders was arrested. At the time Harish was at the location of the ATM to make sure that the systems were working fine before it went live.
The police charged the founders for promising unrealistic returns and trying to cheat customers when they had made no such promises. Many other items belonging to the company were unjustifibly seized including computing devices, passport and cash worth $2,500.
Calling The Product Bitcoin ATM Was Wrong Move
Sathvik said that branding the product as ‘Bitcoin ATM’ was the wrong move. It created an impression that kiosk is similar to the bank ATMs which requires regulatory approval. However, Vishwanath said that running a device like kiosk doesn’t need any such approval.
“It is just a kiosk which enables our customers to transact with us and not really an ATM that requires the banking regulator’s approval.”
Since Unocoin’s machines were going to work as cash deposit or dispensers and had no association with the banking channels, they should not have been considered as ATMs by the law enforcers.
He had made the same argument in a Tweet following his release.
You know the story so far. From my understanding, main stream media calling crypto assets illegal & comparing our Kiosk with a bank ATM [that needs RBI perm as it is like a bank branch] was the trigger. Now that I am out,will try my best to give clarifications & move on. @Unocoin
— Sathvik Vishwanath (@sathvikv) October 26, 2018
It is highly likely that if the word ATM had been skipped in their marketing efforts, the law authorities wouldn’t be as hostile as they had been.
State Of Cryptocurrencies In India
It is to be noted that Indian finance minister, Arun Jaitley has said that cryptocurrencies are not recognized as legal tender in India. This does not mean that it is illegal. However, the banking ban has casted doubts in the minds of ordinary people of the country.
Prominent exchanges like Zebpay are fleeing the country and setting up shops in Malta to escape the toxic environment the government has created.