Bitcoin Forum

Hello
As you know, me and my team run Unocoin.com - a trading platform for bitcoins in India.

We are asked for explanation by an authority of what exactly Unocoin does and how we are operating including regulation/licenses etc.

We are needed to visit that authority office and give the explanations on wednesday (day after tomorrow). We have printed out various articles where RBI has said they do not want to regulate bitcoin and articles on bitcoin related to india that sheds positive light and articles on bitcoin which describes its advantages to the rest of the world. Below are the links.

If you know any article or blog post which could reinforce our argument saying bitcoin is good by itself and is here to stay, help us by replying in this thread. I am sure this list be useful to many Indians bitcoin businesses in future.

http://articles.economictimes.indiatimes.com/2013-08-14/news/41409715_1_bitcoin-gox-virtual-currency

http://www.coindesk.com/the-reserve-bank-of-india-regulate-bitcoin/

http://www.coindesk.com/indian-tax-authorities-seek-clarification-bitcoin/

http://www.coindesk.com/reserve-bank-of-india-clarification-virtual-currency/

http://www.coindesk.com/indian-government-says-rbi-examining-virtual-currencies/

http://www.coindesk.com/digital-currencies-gaining-popularity-india/

http://www.coindesk.com/indias-unocoin-closes-250k-funding-deal-silbert-investment-fund/

http://www.coindesk.com/indias-central-bank-one-day-use-digital-currency-chief-says/

http://economictimes.indiatimes.com/news/international/business/samsung-testing-bitcoin-technology-beyond-currency-use/articleshow/46901816.cms

http://economictimes.indiatimes.com/news/international/business/ibm-looking-at-adopting-bitcoin-technology-for-major-currencies/articleshow/46547996.cms

http://economictimes.indiatimes.com/news/international/business/In-boon-for-bitcoin-UK-to-regulate-digital-currency-exchanges/articleshow/46615950.cms

http://www.business-standard.com/article/companies/infosys-to-re-engineer-finacle-revamp-compensation-structure-115041300355_1.html

http://www.indiabitcoin.com/bitcoins-is-not-illegal-in-india-a-whitepaper-by-nishith-desai/

http://www.coindesk.com/information/is-bitcoin-legal/

http://www.coindesk.com/new-bitcoin-exchange-unocoin-launches-india/

http://www.coindesk.com/people-free-use-bitcoin-exchanges-says-chinese-central-bank-official/

http://www.coindesk.com/goldman-sachs-director-board-bitcoin-startup-circle/

http://www.coindesk.com/wall-street-analysts-bitcoin-revolutionise-non-financial-world/

http://www.coindesk.com/bitcoin-exchanges-go-local-drive-adoption/

http://www.coindesk.com/government-report-not-lagging-bitcoin/

http://www.coindesk.com/indonesia-central-bank-takes-new-more-neutral-stance-bitcoin/

http://www.coindesk.com/micky-malka-bitcoin-can-help-worlds-unbanked/

http://www.coindesk.com/survey-results-96-of-merchants-would-recommend-bitcoin-peers/

http://www.coindesk.com/gold-cash-decentralized-data-money-revolution-continues/

http://www.coindesk.com/bitcoin-society-ceo-digital-currency-tool-global-good/

http://www.coindesk.com/bitcoin-means-global-independence/

http://www.coindesk.com/microscope-real-costs-dollar/

http://www.coindesk.com/microscope-true-costs-banking/

http://www.coindesk.com/bitcoin-needs-aggressive-legal-defense/

http://www.coindesk.com/bitcoin-remittance-services-leave-bitcoin-part/

http://www.coindesk.com/giant-awakens-asias-top-bitcoin-stories-2014/

http://www.coindesk.com/us-marshals-one-auction-bidder-claimed-all-30000-silk-road-bitcoins/

http://www.coindesk.com/us-marshals-auction-50000-bitcoins-seized-ross-ulbricht/

http://www.coindesk.com/us-marshals-auction-50000-bitcoins-march/

http://articles.economictimes.indiatimes.com/2015-04-03/news/60787340_1_unocoin-barry-silbert-indian-investors

http://www.coindesk.com/information/how-can-i-buy-bitcoins/

http://www.business-standard.com/article/companies/zebpay-eyes-2-million-funding-for-mobile-bitcoin-app-biz-115031901231_1.html

http://www.thehindubusinessline.com/opinion/its-growing-bitcoin-by-bitcoin/article7134704.ece

http://www.newsbtc.com/2015/04/05/few-notable-startups-driving-indias-bitcoin-revolution/

http://www.newsbtc.com/2015/04/19/exclusive-newsbtc-meets-sunny-ray-from-unocoin/

http://timesofindia.indiatimes.com/business/india-business/No-move-to-regulate-Bitcoins-RBI/articleshow/28071044.cms

http://profit.ndtv.com/news/your-money/article-bitcoin-explained-in-laymans-terms-376029

http://www.coindesk.com/reserve-bank-india-issues-virtual-currency-warning/

https://www.rbi.org.in/scripts/BS_PressReleaseDisplay.aspx?prid=30247

I think you should order the articles in such a way
1) RBI releases, articles containing comments made by RBI
2) Articles in mainstream Indian publications (Economic Times, Business Standard, Hindu, etc)
3) Articles in crypto magazines.

The reason I say this is because the credibility of crypto publications in the eyes of the RBI may be low.

Some comments made by Raghuram Rajan on Bitcoin can be found here
http://profit.ndtv.com/news/economy/article-there-are-concerns-about-crony-capitalism-raghuram-rajan-718524

Too bad that every bitcoin conference is followed by something like this. The Global Bitcoin Conference @ Bengaluru was followed by sudden activity by the authority. Everything was quiet for some time. Now they are active again after The Bitcoin Story @ Ahmedabad. I think it is better if they interact with the bitcoin community on regular basis. That would help to clear some doubt, if they have any.

For the meeting tomorrow, it seems that you were called upon by RBI. I would strongly suggest to have the Raghuram Rajan video footage in Mobile. Show it to them at the earliest. Also, I think, what polynesia has stated above is correct. Do not give primary importance to CoinDesk. Focus on what mainstream media or tech stalwarts are stating about Bitcoin. And it is good if someone from Nisith Desai & Associates accompany you.

GooD Luck... Let us know what happens.

The bitcoin is good for us Indians in many ways as it gives us a little Freedom with our Economy and we also pay tax on it!

Just tell them its a play currency ,and people are just having fun with this piece of code. I wonder what problem they have with it. Is it Unocoin they are targetting or bitcoin ?

You could refer to some articles or videos posted on reddit in the past. This might help :
http://www.reddit.com/r/Bitcoin/search?q=india&restrict_sr=on&sort=relevance&t=all

Here is how I'll handle this :

What is Bitcoin ?
Its a few thousand lines of software code which people exchange among themselves just like a fish seller exchanges fish in a market.

Dont blow their mind with technical sophistication they will not understand it (even if they are educated). Tell them buying "Bitcoins" is like buying Windows 8 from Microsoft.


What is the purpose of Bitcoin ?

Nothing. It is just a piece of research software. Quote research articles from various universities now.


What is the nature of business the Unocoin does with Bitcoins ?

We sell software. The software is named Bitcoin.

Is bitcoin a currency ? If so, is Unocoin registered as a forex exchange ?

No Unocoin is not registered as a forex exchange it is so because in India Bitcoin is unregulated [cite all the RBI quotes / articles now] In India Bitcoin is not recognized as a currency. But yes it does have a monetary storage value. It is a piece of property.
 
To explain further Bitcoin is a huge registry book (the network) and people own a part of that book like a page from the book. It is a piece of history and modern technology at the same time and it has a value.

Unocoin simply sells this 'software' / registry book / fish to the average Indian citizen for a certain price and retains a small fees for every sale.


Then you can continue the discussion as you feel like. This is the exact way I approached my investors when I was pitching for Krogyan.

speak to all the other exchanges as well operating in india. its not their fight today but it may be tomorrow. if you all go united, there is a stronger chance each entity comes out stronger. if each of them starts getting picked out individually, it is not going to help anybody. I really hope you are in touch with Benson and Kamlesh atleast. All the best.

You can tell them on all the illegal things that can be done, but I doubt they will be understanding towards it, if they don't understand the concept and the need for bitcoin. Doing this would create more trouble for the company. Rather, just tell the pros, and answer any questions they might have. Seems this is tomorrow, so good luck and would be great if you could keep us updated on it as well.

Thanks for your replies. We did follow some of the suggestions above.

There was an incident that we needed to address. As we were fully KYC and AML complaint, and were able to answer the questions asked, this do not look like it would stretch anymore.

The only BIG question we could not convince yet is, regulation about bitcoin. The officer is bothered about bitcoins coming to India bypassing the regulated route and those bitcoins actually being exchanged for INR in India using the service like unocoin.

The issue is not just concerned to Unocoin now - it is bitcoin in general.

Explaining that drug transaction used to occur even without bitcoin, hawala exists which is less tracable than bitcoin, gambling occurs even if bitcoin did not exist etc are the wrong way to approach and i would not consider this for now as the question is about bitcoin rather than just unocoin. It could backfire.

With the current arguments that is happening, I cannot go back to square one and say bitcoin is more of the software with lines of code that is working behind the scenes. They have the idea of transaction volumes on unocoin and this officer we are talking to knows a LOT about bitcoin technically.

Unless we can convince bitcoin is not illegal (not through a whitepaper or article but though a notice from rbi or govt of india), I dont think we can bring up topics about issues with fiat currency and what good the bitcoin is doing to India or to the world.

I keep hearing about one fact but I could not figure out where I can find it officially. "Indian constitution says - unless something or some act is specified as illegal by law, it is not illegal". If someone can point out where i can see this, it would be helpful.

The meeting with this official to continue tomorrow as well.. will keep you updated.

Understood your point.

But you could explain to them that BTC in India is not going to make it on it's own, if they want to track the users of Bitcoins it would be through exchange portals like Unocoin itself.

Any taxation can happen through such exchanges. Where as if someone were to trade BTC face to face they'd have the option of paying in CASH which could be black money but through exchanges like Unocoin & Coinsecure BTC would always be sold or bought with bank deposits providing a solid lead to what extent an individual is involved with BTC.

If they were to poke & shut down exchanges people would do cash trades or anonymous bank deposits which would be completely untraceable and a relation to BTC would never be made.

At first, I am sorry for seeing this post late as you must have had your hearing today only.

As a lawyer, I would suggest the following things-:

1. They are not going to refer any articles of newspaper or websites, unless it is an official government website.

2. Instead of articles give them news about other countries regulating it, that might help.

3. The directors should not visit personally, unless they have been summoned.

4. You are not required to appear before them or submit any information unless you receive proper summons. However, practically it is better not to say such things as it might steam them up.

5. If at any point, you think or apprehend that talks may take wrong direction then take anticipatory bail. There are certain strings attached to it I can discuss it over a call, if you want.

6. Insist that there is nothing illegal about it. They will say that it is not legal but your story should always emphasize that it is not illegal.

Let me know in case you need any info. Will be glad to defend the community.

Regards
--
Kanishk Agarwal
Advocate
CriTaxCorp
Criminal-Taxation-Corporate
www.critaxcorp.com
+919971666252

Hey just saw your reply after posting my earlier reply. I do not think what you qouted about constitution law is in the constitution of India (Bare Act). It might be a qoute in a judgment or by someone. I might be able to research on a judgment about this qoute. Let me know if you need help.

Sorry to hear that such restrictions are being faced by fully KYC compliant exchanges like Unocoin even when Bitcoin is still in early adoption phase.

Can i ask which authority was that?  A financial regulatory body,  police,  or something else?  Although i would completely understand if you don't want to share this.

Agreed.
Any judgement passed by any High Court or The Supreme court where that quote is directly mentioned then you can use that case and quote as a referring point of argument, but that should be done in court during a trial if such a situation arises. Digging up documents based on just a quote can turn out to be costly (in my experience).

1. You are absolutely right. It did not work.

2. It did not work either. All he said was show me what ever is only relevant to India.

3. That is why we are visiting.

4. That is why we are visiting..

5. Want to give it a try before going to bail etc. I will give you a call sometime tomorrow morning. I can see your number in your signature.

6. That is always been our approach.

Thanks for your support.

Tried, did not work to defend saying exchanges are needed to track bitcoins and activities.

The question is going back to - "where exactly can i see what you are doing is legal in india and you are not violating any regulation". So need to defend bitcoin first before defending unocoin. The reverse would have been easier.

His argument is, if bitcoin is not declared legal, then even face to face transactions would deem illegal.

Ok. Then how exactly does indian constitution differentiate between legal act, illegal act, unclassified act? Say for example, you pay money to buy food. how do you declare that is a legal act ?
If i am to physically hurt someone - i know it is illegal as it is written as illegal by the law.

If my quote is not written somewhere - let me avoid it for now.

Cannot disclose the authority. It is something moderately serious but winning over them will be a huge victory.

Summary of Bitcoin as per Indian constitution:
(Disclaimer : These are my own conclusions & I am not mentioning the reasons for most of them; read document to find out. Do not take my word for it; read the relevant documents as mentioned. Do your homework & consult a lawyer.)

• Point of View : "As a Currency"
  Relevant Document : The term currency is defined in section 2(h) of the Foreign Exchange Management Act, 1999 (“FEMA”)
  Relevant Conclusion : 1. Bitcoin is not a currency as per the definition
  2. The definition is prone to easy expansion by RBI, so RBI might change it in future.
• "As Digital Money"
  Document : Notification No. FEMA 15/2000/RB dated May 3, 2001
  Conclusion : 1. Any instrument that can be used to create a "financial liability" is also a currency.
  2. Bitcoin is NOT such an instrument since it is not backed by any institution and only at the consent of participating parties.
• "As Securities & derivatives"
  Document : Section 2 (h) of the Securities Contracts (Regulation) Act, 1955
  Conclusion : 1. Bitcoin is not a security or a derivative.
• "As Derivatives & Negotiable Instruments"
  Document : Section 17(6A) of the Reserve Bank of India Act, 1934 & Negotiable Instruments Act, 1881
  Conclusion : 1. Bitcoin is not a derivative or negotiable instrument.
• "As Prepaid Payment Instruments"
  Document : Payment and Settlement Systems Act, 2007
  Conclusion : 1. Bitcoin is not a prepaid payment instrument since the value is not constant.
• "As Computer program"
  Document : Indian Copyright Act
  Conclusion : 1. Bitcoin is a computer program.
• "As goods and property"
  Document : The General Clauses Act, 1897 & the Forward Contracts (Regulation) Act, 1952
  Conclusion : 1. Bitcoin is 'goods' and 'movable property'.
• "Using bitcoins"
  Document : The Sale of Goods Act, 1930
  Conclusion : 1. Bitcoin is a form of 'barter' and thus not governed by this act.
• "Buying/Selling bitcoins"
  Document : The Sale of Goods Act, 1930 and Customs (http://www.dov.gov.in/newsite3/section7.asp)
  Conclusion : 1. Customs on barter transaction is an unsolved problem in our law, thus unclear on buying bitcoins from abroad.
  2. Software imported online does not attract any duty under Indian law.
  3. Bitcoin is legal barter if the good it is being exchanged for is legal and the bitcoins were obtained by legal means. (Eg: No silk road coins allowed)

Overall conclusions :
Definition of 'currency' and 'prepaid payment instrument' can be and has been in past changed overnight to include bitcoin.
Currently bitcoin is to be treated as 'computer program' or 'software imported online' depending on where they were mined.

Tip! if it helped :)

In that case in you will have to explain to them with the help of a lawyer who is ready to argue with the officials as if it was court.
They are indirectly asking you to provide the legitimacy of Bitcoin when the RBI officials themselves have declared on public forums that Bitcoins are not illegal in India. Its not your job to make new laws. So in my opinion get a financial adviser who specializes in Business law and most importantly FEMA 99
You must talk with your lawyer and have him advocate the clauses of FEMA in favor of your business. Defend your business defend BTC after that. You MUST bring their attention to the very limitations and restrictions imposed by FERA 74 which lead to the introduction FEMA 99 and how trading in BTC is in no direct violation of any FEMA 99 or PMLA 02 clauses.

Its a lot like lobbying. They will not be on the same page with you, but they dont necessarily have to oppose you either. Let them speak and let them give you a solution before you present yours.

Seriously, good luck bro.


Edit :
+1 to whatever Skang said.

Sorry if this is late, good luck with your meeting tomorrow. Apart from what Skang wonderfully summarizes, and since I am not much familiar with the laws, what I would suggest is doing searches on the legality of bitcoin in other countries, and use the same arguments for here.

Couple of articles and discussions:
http://en.wikipedia.org/wiki/Legality_of_bitcoin_by_country#India

Might also be a good idea to hand out this in the meeting :
http://www.coindesk.com/information/is-bitcoin-legal/

https://fas.org/sgp/crs/misc/R43339.pdf

Instead of going yourself, you should send a representative.. and ask them to deal with your legal/KYC team.

These guys (the "authority") may know a bit about bitcoin but do they know anything about the law?
Without a warrant, you should not give even a single byte of customer details to anyone.

EDIT: From what I understand they are looking to make a quick buck.

I hope your meeting went well today as well. A few concerns of mine

1. An incident? So is it that they are wanting transaction details from you about your customers?

2. As i was to understand moving money (INR) out of the country was the thing that was not allowed. How are they suddenly concerned about money (Bitcoin) coming into the country. There are various ways money flows into the country. Western Union, banking channels, etc. and it was relatively easy to move money here compared to moving it out. What is this fear with fund inflow?

if I remember correctly- Nisihth Desai & Associates are your lawyers. Don't understand, why you being a VENTURE CAPITAL FUNDED BUSINESS
are "requesting for help", when Nishith Desai & Associates have already taken out the white paper & concluded
BTC are not illegal in India

are we all being taken for a ride by Unocoin?? are we all missing something??

if it is not illegal, tell them clearly "BITCOIN IS NOT ILLEGAL" and if it is illegal by any means- just go and get arrested. It is that simple.

what are you afraid of..........?

Regards,

or have Nishith Desai Associates gave up on you? and we all are screwed for sending our pan cards, voter ids to unocoin.com??
please let us know, when is the right time to run?? i don't want to be in jail.....

Regards,

I am sure that won't happen in anycase. And neither would anyone from the company. If it was illegal they would already have them arrested. And since its not illegal right now, no one is going to get into any trouble.

@dashingriddler Any updates from today ?

please somebody from unocoin.com tell us, are we going to jail?? this whole bitcoin thing is scary as hell.

Regards,

Irrespective of whatever happened, did you do anything illegal? If not, then why worry? Have faith in our system?

1. Yes a set of transactions belonging to a particular customer. This has been addressed for now.

2. Moving money out of the country is regulated. Also same with getting money into the country. All channels you mentioned are regulated. The issue we are trying to address is, how can an external official figure out from where the bitcoins (funds) coming from without really questioning the person who got the bitcoins. they can do this with all regulated channels but not with bitcoins. an interesting question though and we have explained the tech behind bitcoin to have them know how bitcoin works and why this is not easily possible with bitcoin.

They know about bitcoin and no customer details are given.

Yes NDA are our lawyers - we have not engaged them in this matter.
I am requesting for help from the bitcoin community for which i am a part of. I am keeping this thread posted, just to let the bitcoin community in india know what kind of questions exist in the minds of officers who may be contributing to regulating of bitcoin in india if it ever happens.

Bitcoin is legal or illegal is not the basic question. it is about on what basis we are self regulating it.

I never said i am afraid of something. thanks for heating up the conversation though  ;)

NDA continues to be our lawyers - we have not engaged them for this yet.

None of the customer docs have been asked for submission. so do not worry.

i am not sure why you are talking about going to jail if you have not done anything wrong.

I agree with what you say.

no much updates from today. was much of waiting. new question now is, how to know who sent bitcoins to an indian resident if that resident is not willing to share the info as bitcoin is unregulated. my explaination is to explain about bitcoin tech and to explain how it is different from regulated channels as of now.

No, unocoin has not done anything illegal. so not worried.

No you are not - i myself did not know you are a customer of Unocoin till now.

bitcoin being a disruptive technology comes with a package of its own advantages and disadvantages. if you are scared of disadvantages, then probably you should not be a part of it.

nothing can be as scary as bitcoin if you do something illegal with it - you can take my words for granted !

Well isn't it the same case just as cash ? Obviously, bitcoin is not something much different in terms of sending. You can first say that even cash can be given to a person on the street, and it would be very hard to know where that money came from, with bitcoin its the same, but can somewhat be tracked, because of the blockchain.

You can also use this point as a plus for Unocoin by saying,  that existence of services like UnoCoin or any other exchange, is the only way those people can usually convert their bitcoin to cash, and because of services like these, is how they can regulate it somewhat. Else, there is no other way to know if a person has bitcoins, unless you are going through his PC.

you say:Bitcoin is legal or illegal is not the basic question.

If that is not the basic question, WHAT IS?? This rings serious warning bells. First the Nishith Desai Associates comes up with
thick 46 page booklet, telling the world it is not illegal in India and now it is like, anyone can get screwed and land up in jail for Bitcoins in India

Simply put, I don't want to land in jail for just being a customer of unocoin.com.......do unocoin.com provides any legal
protection measures to there customers, because not everybody can afford top lawyers??

Regards,

would really appreciate, if unocoin.com answers asap as i am really very very anxious  :-[  :-[  many family member and friends have invested in unocoin.com on my recommendation, and i don't want to face social embarassment. it will be too much for me to take.

This is popcorn stuff!

No one is going to jail and no one is protecting you either.

Your argument is "..I bought bitcoins because Unocoin said it was legal, otherwise I would have never bought bitcoins.."
Lol, you went to Unocoin because you wanted them coins.
On the other hand Unocoin is guaranteeing that the coins they sold you were not illegal & that they have proof that all the coins they are selling were bought from verified people, whose identities they can produce if required by law.

I would say it is better than cash. money coming into the country is not same as giving cash to a person on street. jurisdiction and volume matters.

My saying of course included what you are saying. I have mentioned that it is the points like Unocoin where a regulation can be applied.

it's sad that you think social embarrassment and loss of money is popcorn stuff.......:(

my concerns raised above are still not answered. at least unocoin.com should come out with an official white paper release on there website on what happened and should there customers approach lawyers for advice........

Bitcoin is not illegal - agreed. There is no regulation for bitcoin - agreed.

The bitcoin technology has bought up new issues - need for questioning the users to identify from where he got bitcoins and to where he sent bitcoins if something goes wrong, jurisdictional controls can be violated and cannot be controlled.

Attempting to regulate something that cannot be controlled makes less sense. regulation can come up only if there are points of control.

So what next?

makes no sense to me, now i know why you are the ceo, because you can twist words to suit your purpose. sir, i am a common man and have invested in unocoin.com and none of my concerns raised above have been answered. pls answer in simple, easy to understand english. please :(

no it is not popcorn stuff. and there is no loss of money.

i m trying to address ur concerns. no plans of such white paper. you need not worry about approaching a lawyer unless you have done something illegal with bitcoins.

thanks at least you recognize this is not popcorn stuff. it is people's savings in question
here and possible jail, social embaraasment etc. you are the ceo i guess.

the only illegal thing i might have done, is sending my pan card, voter id and linking my bank account,
and buying my bitcoins with unocoin.com whose executives are facing questioning by authorities.

pls ceo unocoin.com, address the concerns, it is very important. there are many customers like me watchign
this thread

quoting:



you say:Bitcoin is legal or illegal is not the basic question.

If that is not the basic question, WHAT IS?? This rings serious warning bells. First the Nishith Desai Associates comes up with
thick 46 page booklet, telling the world it is not illegal in India and now it is like, anyone can get screwed and land up in jail for Bitcoins in India

Simply put, I don't want to land in jail for just being a customer of unocoin.com.......do unocoin.com provides any legal
protection measures to there customers, because not everybody can afford top lawyers??

Regards,

I think my language confused you. Let me put it this way.

In the conversations about bitcoin, when i mention bitcoins are not illegal - i am not getting confronted.
when i say there are no regulation for bitcoin in india as of now - i am not getting confronted.

I mean to say, the officers are agreeing with me when i say these.

Few of their arguments are "The bitcoin technology has bought up new issues - need for questioning the users to identify from where he got bitcoins and to where he sent bitcoins if something goes wrong (which they need not do in case of regulated transactions), jurisdictional controls can be violated and cannot be controlled (as in sending bitcoins out of country and getting them into the country)."

so my argument is "Attempting to regulate something that cannot be controlled makes less sense. regulation can come up only if there are points of control." - as in make us that point of control.

YES bitcoin platforms and exchanges can get regulated - see the news today http://www.dfs.ny.gov/about/press2015/pr1505071.htm

again gibberish,

LEGAL or ILLEGAL??

when your lawyers Nishith Desai Associates came up with thick 46 page booklet, you guys were shouting from rooftops,
that Bitcoin is NOT ILLEGAL IN INDIA and then why all this drama and use of tongue twisting language.....?

If you have done anything illegal - whether you have used or bought bitcoins or not - you could go to jail.
In other words - bitcoin is not illegal - but what you do with bitcoin could be illegal

Sending your KYC documents is not illegal. It is required as a part of our self regulation for you to trade bitcoins on Unocoin. I believe it is same with most of the trading platforms or exchanges in India and abroad.

Executives of any kind of business can get questions by authorities. This do not make your association with such business illegal.

Yes I am here to address your concern - i have not left this thread orphan inspite the reason for this thread creation was quite different.

I want to add my little input to this discussion. This ORGANISATION wants to know where the bitcoins are coming from. Greenpeace is being shut down by the government especially because they were receiving foreign funding. Funding which as per the government is meant to destabilise the coountry.

In the same stance, this probably means the government is really interested about every rupee that is flowing into the country, where it is coming from and what it is being used for. If that is the case, i think the government will end up banning bitcoins as well. It is a highly likely scenario which i have been thinking about since this topic came up. And like it was mentioned in this post before, this is something that cannot be controlled, regulated, etc. It is not possible. In which case, the only way to deal with it is to ban it.

Now the question a lot of people will have is, but it is not banned anywhere else in the world, how will it be banned in India. India will generally follow the precedence, not set it. But in my experience, especially when it comes to national security and protecting the country, India has set the precedence for a lot of things, which other countries realise and acknowledge much later, and implement it later on. So it is quite possible that the precedent gets set here.

This is my worst case scenario opinion.

Best case scenario:
It is given the seal of approval by authorities and rules formed and everyone is happy.

it is like saying, selling car is not illegal, but if you kill some person with the car it is illegal.
does car dealership, receive questioning from authorities??

please don't take us for a ride here, i already had pretty bad experiences due to unprofessional
attitude of executives at unocoin. now it is a serious matter involving legalities.

and pls preserve the natural quote procedure of bitcointalk.org, as you write above the quote, confusing everybody.

Sathwik, as u r online right now I'd like to ask u 2 quick Qs...

i. Did you show them the video where RBI governer is speaking positively about bitcoin ? If yes, what is their response to that ?

ii. Is the 'incident' u mentioned, for which all these processes are taking place, involved with high volume trading or specifically related to something illegal ?

Yes when those authorities need to know how exactly the car works and what can be done to avoid the owner of the car to kill some one with the car. For example say they put speed regulator - and for this to happen, they need to know how the car and its engine works first.

If you have any unpleasant experience with Unocoin, please write to us at support@unocoin.com - i take care of tickets personally and i can address it.

If you have assumed that the govt officials will never get involved with bitcoin for ever - then you would have been only correct if bitcoin never tried to grow big and illegal activities is not even possible with bitcoin.

something is really not right.

time will ultimately clarify, it is better if you be open with the community regarding questioning, or you might have to  face embarrassment later on.....

Yes - it was discarded saying it is more of the personal opinion.

It is NOT related to high volume trading. It is related to a set of specific set of transactions by a specific customer.

1. it is very surprising, they discard the thoughts of Raghuram Rajan, Governor of Reserve Bank of India!!!

I remember Christine Lagarde, International Monetary Fund Chief saying, we all listen very carefully to what Raghuram Rajan says,
not only in India, but the world listens to him. and that clip was aired on national television and it was not "personal opinion"
were they really government officials??

2. did they already had the name of that customer?? or they picked him up after you gave the list of customers??

Hi Sathvik,

Please update us about the second meeting when it happens. Few points:
1. Who is this authority? why not make their name public?
2. It doesn't seem like a big deal, in case they only wanted info; which every LEA is authorized to do (with proper warrants of course). Apart from that whats the issue?

Everything I can open up with the community, I have. I ofcourse am happy to let you know the questions but it is you who commented asking why am I here when unocoin is a venture funded exchange and have nishith desai associates backing. I am here only to let u know what is happening with the questioning.

Yes i thought his comments would mean something to them as well.

yes they had the name of the customer. unocoin never gave the list of customers to any one.

Sathvik please calm down. Don't panic. You are the CEO and it is natural for people who invested there savings into bitcoin via unocoin.com to ask some questions, when the authorities have come knocking.

1. i cannot disclose it for now
2. they have some understanding of bitcoin. if we take a step back and examine - every regulatory authority / act will have one or the other issue with bitcoin which would affect their smooth operation - rbi, irs, ed, forex, combating of funding terrorism, money laundering, capital controls, drugs, ngo mis-use and what not.

so there is enough reason for authorities to bother about bitcoin.

what info was given by Unocoin regarding that customer's transaction to the authorities?

Well I am ofcourse calm. i had just forgotten a smiley in that comment - it was not meant to be so serious :)

Sure i am here to answer questions.

Technically - nothing. The info they needed was there on his bank account statement already. I just searched our database based on the name they specified and confirmed, yes he is our customer.

The only think I can see coming out of this post is trying to get more traffic to your site.


1. You Refuse to provide details on the "Authorities" hassling you only showing that there is need to hide this information. If such authorities were involved in such a disagreement then really disclosing them to the public would put much needed pressure on them to back down faster!
2. You have provided no valuable facts and have twisted this conversation into 3 different topics as stated by another member.
3. You refuse to provide any documentation on the official website about this matter.
4. More then enough evidence has been provided to satisfy any and all "Authoritative Agencies" on the nature of bitcoin. (Any law authority figure that is not smart enough to put 2 & 2 together and get the result should not be an Authoritative Figure!)


As I read this thread over and over I keep coming to the conclusion that its a probe to gather information on what it would take to regulate a crypto currency in a specified country.

If such a situation is actually occurring then it is your responsibility as a CEO to provide as much information to your members as possible as it is your responsibility to provide a secure environment for them.

 

rather you should not even have entertained them with even one byte of customer's data, without proper warrant or summons

I really doubt your motives here, everything has been jumbled up.... ???

why are you not naming the authority?? it is the least we can expect of you

Most likely because there isn't one!

As expected- no response. Sathvik (CEO Unocoin.com) you can hide, but time will catch up with you. have to go sleep. bye.

u read my mind.. :)

Traffic to site?? There are less than 10-15 active users on India sub-section where this thread is there.

1. I never said authorities are hassling me. They have the questions for me and i am trying my best to answer.
2. that is right - 3 topics. first was the transactions i had to address. then it is about how unocoin is running the business and if it had any reguatory approval. once i could convince, bitcoin is not regulated the questions now is about bitcoin itself.
3. i dont see why i would put this on the website. thousands of businesses from flipkart to airtel have tens of cases running on them - none will keep updating in their website. in our case, it is just the questions i am answering and you really want me to write that i am answering questions?
4. huh that is a dumb comment. if you think every official know about bitcoin and how it works - you are crazy. i dont see why every authority would be bothered about bitcoin to the same extent.

sure, gathering of info and proposing to take a stance is better than leaving in limbo when it comes to regulation

the security of the environment has not changed to provide a new update to our members !

I have not entertained with customer's data apart from confirming the individual they are naming is our customer. I do have the summons. i mentioned this already.

I just said i cannot disclose as of now while i am being questioned. and naming them here do not change anything.

i need time to type responses when there is a series of questions / comments in a single post. you have my replies now.

If that keeps your mind calm.. good for you to assume that way than just being bothered :)

Before replying please make sure you understand exactly what is being said!!!!

My comment was mainly pointing out the fact that in the start of this thread you were looking for information to provide some "Authorities" that bitcoin was not regulated, if there are ever any "Open Investigations" on anything no matter the topic it is the job of an "Authoritative Figure" to build a case of facts thus doing his or her own research on the topic before confronting any and all subjects involved.

I do know for a fact and I KNOW that there are many authority figures that will back me on this! There is no way in HELL that an "Authority Figure" would confront thus in question and ask for information to be provided to build there case!

Do cops looking for drugs go up to the criminals they are going to bust and ask them for information about the drugs so that they know if its legal or not?


And not notifying your customers about a supposed "Authority Group" contacting your business about its legality is very unprofessional.


Oh and as for your comment: "gathering of info and proposing to take a stance is better than leaving in limbo when it comes to regulation" there are millions of people in this world with much more money then you would ever see in your life that would make sure it stays un-regulated!

Yes that was the first day of discussion. Now that the second day of discussion is also over and still been called tomorrow for more discussions with the senior of whom we were talking to.

That is exactly i did. i did my research to gather articles, took the print outs, highlighted the relavent lines and presented to prove bitcoin is unregulated and business like ours is unregulated as well. http://imgur.com/bejDVWg
the articles did not work but i could get the message across.

What case are you talking about?

sure if it was left unanswered. i already mentioned they are fine with my statement saying bitcoins are not illegal and they are unregulated and is so our business.

MORE MONEY? what are you talking about? what has more money to do with regulations?

If the govt says bitcoin businesses can only perform business by following a specific set of regulations, then the businesses must follow or else go out of business.
on the side note you can read this http://www.dfs.ny.gov/about/press2015/pr1505071.htm

I guess you missed the Wikipedia lol

In June 2013, the Reserve Bank of India (RBI) issued a notice acknowledging that virtual currencies posed legal, regulatory and operational challenges. In August 2013, a spokesperson wrote in an email that bitcoin was under observation.

On 24 December 2013, the Reserve Bank of India issued an advisory to the Indian public not to indulge in buying or selling of virtual currencies, including bitcoin. Following the announcement Bitcoin operators in the country began suspending operations.

The first raid in India was undertaken a couple of days later in Ahmedabad by the Enforcement Directorate (ED) on the office of the website, buysellbit.co.in, that provided a platform to trade in this virtual currency. The preliminary investigations found it to be in violation of the Foreign Exchange Management Act (FEMA).

On 28 December 2013, the Deputy Governor of the RBI, K. C. Chakrabarty, made a statement that RBI had no plans to regulate Bitcoins.

The consolidated legal position in the month of August 2014 is that the legality of bitcoin is in doubt in India. The Reserve Bank of India has cautioned users of virtual currencies of various legal risks. Indian law enforcement agency Enforcement Directorate also searched the office and website of a bitcoin entrepreneur to analyse any possible legal violation. ED believes that Bitcoins money can be used for hawala transactions and funding terror operations.

Perhaps you neglected to check the bitcoin website and wiki.

Ref: https://en.wikipedia.org/wiki/Legality_of_bitcoin_by_country#India

Wikipedia did not even count as a reference when i was doing a project in my masters haha. So did not bother to show it.

Everything else you mentioned is true and I have shown these articles. The links to these are there in my OP. But what is your point?

Just so you know - apart from that Dec 24th advisory, everything else was discarded. The way i could convince about being unregulated is because there is no notice saying it is getting regulated. Not because chakrbarthy said he has no plans of regulation.
These guys want in form of notice by govt or regulatory bodies. Quotes and comments on quotes or articles on quotes did not count. Even the regulatory landscape
in other countries did not count.

RBI never said "not to indulge" !!!
It only asked you to be cautious and told you that cryptocurrencies are unregulated and thus risky.

Anyways I have edited the wikipedia entry.

right - and that risk meant both financial and legal risks. financial one meant the hacking or lost wallet or volatility etc

Again I think you are Mis-understanding the point as you have with everything anyone else on here has put. Maybe you need to take the time to actually READ something before posting and give some good thought!! ANYTHING everyone else has stated you have twisted or "Mis-Understood".


POINT BEING: According to MANY articles not just what was declared on the wiki, the INDIAN Government is already well informed about Bitcoin and its purpose MEANING they would never need to approach a small bitcoin company about anything. They already have there facts together when it comes to bitcoin meaning if they needed to proceed with charges they sure as hell do NOT need any researched material. So any "Authority" figure you are referring to obviously is not of any importance so why you had to make a big deal about it and argue with people on here about it is beyond me.


Next time if some supposed "Authority" comes to you with anything how about you turn the tables on them and ask them why they "Apparently" know nothing about bitcoin!


Oh and PS: There's no need for any more opinions, my point has always been that this post is just for attention and the more you post it just goes to show I was right and anyone that is truly part of the community would acknowledge that. It doesn't take a rocket science to figure out what Bitcoin is, hell the 68 Year old Woman at the licensing department down here knows what it is and she don't even know much about computers she said when I went to have my Bitcoin business licensed.

That just shows you have no knowledge about authorities in India and how the systems works here.

If there is a crime, the authorities first arrest the person who committed it. then the next set of people who helped indirectly will get interogated and convicted if found guilty. then the next circles around them who are in any way related to these people will get questioned.

in india the first thing people getting interogated or questioned hear from the authoities is "you did a mistake and know about this when you are doing it". then depending upon your answers, the conversation grows. unless they are convinced that there was no wrong done, these people getting questioned need to get to their office and answer new questions. the officers keep calling once or twice a month and get the answers. then finally when they believe they have all the info, they will get the FIR done. till the case is obviously referred to the court.

this is not the first time i am explaining about bitcoin to an authority http://www.coindesk.com/indian-tax-authorities-seek-clarification-bitcoin/

it is never as simple as - ok you did the crime, get into jail. or - oh you did not do anything wrong, please walk out now.

as i explained, we are summoned to explain a set of transaction by an user. so they would obviously continue questioning us to know fully about how bitcoin got used in the incident and how such thing can be avoided in future. the officers i am talking to, did not know much about bitcoin before our attempt to explain how it works. today i am explaining to his senior and he do not know much about bitcoin as well and he is not a technology guy.

the office i am visiting right now is related to the place where unocoin customer resided when the incident involving those transaction happened. unfortunately it is not the head quarters of the authority or have a set of people who researches about technology. this is the first incident involving bitcoins the office is seeing - they want to know more about it as to know what exactly about bitcoin is making their job tougher.

i wish people or officers in india know about bitcoin as much as that 68 year old lady did.

Check also this video
https://www.itbit.com/blog/watch-bitcoin-blockchain-and-the-future-of-financial-transactions

Sathvik, it seems btcxindia.com is shutting down due to crackdown, can you let us know who were the authorities??

PLEASE DON'T HANDOVER ANY CUSTOMER DATA UNTIL YOU GET PROPER SUMMONS OR WARRANTS

+1 . Please don't sell out under pressure. Remain ethical.

Sathvik can you please assure the community, that you will not crackdown under pressure....please.....

Good video - could not watch in full. will do some time.

Yes, they are shutting because of loss of banking partner. We are good on this front.

Sure - no data will be given unless i get proper summons or warrants. Present discussions are pertaining to bitcoin technology itself than the business activities on bitcoin.

thanks  :)

any idea what banks they use?

Sure, i would go all in to serve bitcoin community in india.

Update on todays meeting:
Met with the officer whom i have been meeting since 2 days. The meeting was short.

Meeting with the higher office above this person did not happen.

Explained what chainalysis is doing and how it could be helpful in law enforcement. He asked me to track a particular address to start with using this tool and report it. this is one of the addresses involved in transaction which we are trying to crack down.

http://www.dfs.ny.gov/about/press2015/pr1505071.htm did not make much sense as it is not indian. i brought this up just as a sort of FYI though.

Through an intro i did catch up on skype with chainalysis guys to see if their tool is helpful. I found it to be incredible and it did provide some of the insights of the transaction in question.

I (or harish) will be reporting the findings during our next meeting with the officer in a week or so. probably there wont be any new news on this till then.

kotak

they should just move to HDFC, ICICI or Axis.....plenty of options....there is more to BTCXINDIA.COM closing story.........

I would at least say, there would be more reasons than this one alone.

+1

BTCXIndia.com CEO Kamlesh is definately not very open.......

Maybe you can post the address or the transaction on here, and we could help track or find it. Then you could just claim it was Chainanalysis that helped you find out the information.

I cannot understand why you are interacting with a government agency on behalf of your business (that is a custodian of identity and financial data) without using a lawyer. It just seems funny that a government agent is asking you to do what is supposed to be their job, and you seem to be happily complying. What you should be doing instead is searching for a lawyer who is knowledgeable enough about bitcoin and having him on retainer to defend your company as and when required.

What you are doing now is essentially similar to breaching the trust your customers had placed in you when providing you with their personal data. Remember, everyone is presumed innocent until proven guilty. If the government official thinks a crime has been committed, they need to follow the proper procedures outlined for them to investigate it, not hassle you. If they need information from your company, they need to produce a court order (or it's equivalent in India). Of course, these are things your lawyer will be able to tell you more about. It's not guilty people who use a lawyer, it's the sensible ones.

For a company that is as well funded as yours, your behaviour is very shocking.

I started this thread thinking I may be able to get some help from community but I was somewhat wrong. The way this thread has progressed combined with news from btcxindia has confused indian bitcoin community and stakeholders. And wrong things are getting picked up by press/media.

Few things I have tried to make it clear but the question keeps coming up non stop in here and in other threads in reply to comments:

1. Till now, No data from Unocoin or its customers has been given to any officials. They have not even been asked for.

2. there is no relation to the topic of this thread and what happend with btcxindia as far as i know. All our banking relations are secure.

3. bitcoin is not illegal in india and bitcoin is unregulated in india as of now. If you are doing something illegal, irrespective of whether you use bitcoin or not, it is seen as illegal by law. Also if you want to do something illegal, bitcoin will be the last thing you would want to use. You could get away with it today or for next few years, but as technology continues to improve and as new challenges get faced to enforce law / bring compliance, you could get traced back caught sometime down the line.

4. I continue to put my best possible efforts to safe guard the interests of bitcoin community in India. period.

Our next step is to have one more meeting and try to see if we can close our discussions and if it still looks like it gonna continue, we will just engage our lawyers and we will get back to continue building our business. We have considered changing our approach based on the feedback of our well wishers and stake holders suggesting there is no point in dealing this ourselves.

This thread did help me get some important connections (who IMed me instead of writing here directly) - thanks for that.

Given these, i do not see any open questions that i still can answer/disclose. If you have any concerns as long as it is related to bitcoin or unocoin, please send me an IM and I am happy to address them. This thread will be locked for now.