India’s Harish BV, the 37-year old co-founder of Unocoin Technologies, has been arrested for operating the first Bitcoin ATM in the subcontinent. The ATM was located in Kemp Fort Mall, a shopping mall located in Bangalore (also known as Bengaluru), the capital of Karnataka, and one of the largest cities in India.
The police’s cybercrime department offered an official statement to the media: “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”.
Officials ended up seizing a teller machine, two laptops, a mobile phone, three debit cards, a passport, five credit cards, and Rs 1.8 lakh, the equivalent of around $2500. Harish BV was sentenced to police custody for seven days, and law enforcement officials also said that more “arrests were likely”.ts
Unocoin is an Indian cryptocurrency exchange that touted the new ATM as a way for its users to exclusively exchange and withdraw money from their digital wallets. The exchange was also planning on installing ATM in other major Indian cities, Mumbai and Delhi.
The move was a clear way to circumvent the fact that the Reserve Bank of India was forbidding banks from supporting cryptocurrency exchanges in the country. While many believed that the interest of cryptocurrency would eventually lead the decision to be reversed; it has led to the shutdown of the country’s largest cryptocurrency exchange, Zebpay.
Our Machine didn’t go well with few mainstream media reports who projected it under a negative light. The machine is still under final testing mode and it will be up and running in the upcoming week. The machine has been temporarily moved from its original place of installation.
— Unocoin (@Unocoin) October 20, 2018
The ATM apparently was not even operational at the time. Unocoin did not respond to media inquiries, but simply stated in a tweet that “the machine has been temporarily moved from its original place of installation”.
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The other co-founder of Unocoin Sathvik Viswanath defended his company and pushed back in a statement, saying “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”, but added that “He did not say ‘illegal tender’. There’s a huge difference”.