Bitcoin Forum

Card frauds used bitcoins to trade money

http://timesofindia.indiatimes.com/city/delhi/Card-frauds-used-bitcoins-to-trade-money/articleshow/50922983.cms

The busting of an international syndicate of debit card cloners on Tuesday has unearthed the use of bitcoins to avoid detection. The money siphoned from ATM machines was converted into the cryptocurrency and distributed among the people involved in the crime.

Pankaj Bhardwaj, operations manager of a bitcoin trading firm in Pitampura, was arrested on Tuesday, thought the crime branch is still on the trail of the suspected kingpin, Sumair Sheikh, who is believed to be based in Dubai. Since the accused had access to crucial information related to the ATM cards, the cops also suspect a bank official's role in the racket.

I am not too familiar with the real life identities of the people in this forum, but isn't escrow.ms' real name also Pankaj Bharadwaj?

Yeah. Not a very pleasant piece of news.
http://coinsecure.tumblr.com/post/139031335450/a-change-in-coinsecure

There are few disturbing trend to the news

indeed escrow.ms is Pankaj Bharadwaj

but the most disturbing part is the statement by JCP ( Joint Commissioner of Police) Ravindra Yadav - "The police claim that the Reserve Bank of India has decreed illegal all trade and use of virtual currencies as a medium for payment." (source http://timesofindia.indiatimes.com/city/delhi/Card-frauds-used-bitcoins-to-trade-money/articleshow/50922983.cms (http://timesofindia.indiatimes.com/city/delhi/Card-frauds-used-bitcoins-to-trade-money/articleshow/50922983.cms)) - which is not true. RBI has not decreed Bitcoins illegal in any ways. Is this an illegal frame up of Pankaj? You cannot charge somebody who sells a knife, for murder?

So, in essence, according to Delhi Police, anybody or everybody associated with buying or selling of bitcoins in India, are involved in an illegal trade. That includes Zebpay, Coinsecure, Unocoin, all the sellers on Localbitcoins and others. Last but not least, Localbitcoins.com is also a party to the crime -  as a facilitator.

So guys, if you have bought or sold bitcoins then be prepared for a knock on your door or a visit to the nearest police station.

How do you ascertain motive of a person buying or selling bitcoin. Is a person guilty of not ascertaining the motive of the opposite party? Do we have to ascertain the purpose of the buy and sell ? more importantly, is it illegal to buy and sell bitcoins in India, as stressed by the police? In that case many of us are guilty, as we have traded in bitcoins. Where has RBI stated that buying and selling of bitcoins illegal?  ??? ???

RBI did not said it's illegal but also did not said too it's legal. That is the main problem. It's just loop hole we all using this time now.

P.S. Pankaj Arresting is not a good news for Indian bitcoin communities. It will hurt all of us.

I don't think had anything to do with the legality of Bitcoin.
This had more to do with the way it was used in this instance.

There is no where that the RBI has mentioned Bitcoin or any other Crypto Currencies to be Illegal

Been reading articles on other publications on this issue. It is so crazy that they are coloring bitcoin and trying to show it in wrong light. Just the hot news hungry media !

That's a shocking as well as sad news...
Had dealt with Pankaj not much in long , though 4-5 times but he has been a great member to Bitcoin Indian Community..

Does anyone knows what exactly is the issue? I want to hear view of someone who might know the incident personally rather than media report.

What will happen to Bitcoin users in India after this Incident ???

I got call from many trader today and yesterday night, all were very depressed with this news, and was saying they will all slowdown trade atleast for some months till this news cool down.

Those who dealt with him or personnel of the company he was associated with might be called upon for investigation. But, it wont have any effect on bitcoin users of India in general. Just consider the following facts...

1. Unocoin founders were called upon by police for investigation of a gambling money trail. But, they dint shut down Unocoin.

2. Zebpay presented their product in Ahmadabad in front of RBI officials. This disproves the claim of the police officer in media that RBI declared bitcoin illegal. If that was true, then Zebpay were shut down by now.

So, there is nothing to panic. Just stay away from cash trades.

I don't think there is anything wrong in cash trades per se. For small transactions (<1 BTC), cash would be the most convenient form of transfer.
Is anybody aware of a threshold amount above which cash trades are illegal?

Yes, this news has been extensively covered.

http://www.business-standard.com/article/pti-stories/card-cloning-racket-using-bitcoins-busted-1-held-116020901233_1.html
http://zeenews.india.com/news/delhi/international-debit-card-cloning-gang-member-held-in-delhi_1854003.html
http://www.deccanherald.com/content/528046/card-cloning-gang-sends-bitcoins.html
http://www.thehindu.com/news/cities/Delhi/1-held-for-card-cloning/article8216320.ece

That's Bad news as it will surely affect Indian Market and people already have Bad reviews for Bitcoin since Silkroad and now this. :(
Though , am glad i didn't dealt with him much. :/
Good luck to him... or not (depending on how true the news is)

20k or 50k and it depends on type of transaction and invoice being raised etc I guess. But I don't think you can call the trade to be illegal if it is of more amount though..

According to this article, measures are being contemplated to make PAN card disclosure required for cash transactions beyond a particular level.

http://www.dnaindia.com/money/report-pan-card-may-become-mandatory-for-cash-transactions-beyond-certain-limit-fm-arun-jaitley-2131680

Can this get Pankaj into further troubles?

Also, I don't know why mods deleted the above post of escrow.ms from the "Pay your tax" thread. Any answer for this Benson?

Not deleted by Benson. Maybe removed by OP or reported to a global mod and removed.

Well, if it was deleted after you quoted it, it must have been done by a global mod. Escrow.ms hasn't been online since 7-Feb-16.
His current problems relate more to money laundering than to tax evasion.

I almost forgot that the user himself could have deleted that post.
And no, the post was deleted before I had quoted it.

Guys, do purchasing stuffs from newegg and amazon.com through bitcoins will be illegal or legal?

I guess Delhi Poilice wont catch you for these transactions till you are involved in some kind of fraud or something. I will still continue to use bitcoin as a mode of payment regardless of whatever is happening.

This was very depressing to read about. I had done some trades with him in the past and he seemed to be a great guy, how did he get mixed up in all of this! :(

Warning, OT: Anyhow, i was looking for info on the taxation piece and did not get anywhere on the taxation thread, since there seem to be so many traders on this thread, i would like to ask for your understanding and how you declare earnings from Bitcoin in ITR. My tax consultant had no clue and he just wanted me to club it and show it as additional income. My understanding is that it is not a currency, so how can i show it as additional income. Another thing i do not get is this: Do i have to pay taxes only when i convert the BTC to INR, or do i have to pay taxes even for holding BTC, if yes, at what rate (since it fluctuates so much)?

My understanding is that you have to pay tax when you get BTC in exchange for goods/services (not buy BTC) or when you sell BTC for a profit. You do not have to pay taxes for holding BTC.

So how do i classify my income from BTC for say a signature campaign. Once i convert to INR, do i club with additional income and be taxed according to my current tax bracket? Also, if i "gift" btc to my spouse or family members who are not earning, will that save me from tax liability? If yes, how does one go about "gifting" something virtual and what kind of proof could i provide? If i am trading btc, then it would be capital gains tax? I assume i will need to provide purchase proof though, but this purchase was done off bitcoin sites way before Indian exchanges came about, what could i do in this case, most of these websites preached anonymity so there is no actual record of the transaction on their website and p2p transaction purchases. I don't think providing a txid to the tax authorities would help! :D

the only way bitcoin really helped int his case, was because it can used to make international transfers. one could as well used cash if it were inside India.

i think it is reasonable for the govt. to know who is using bitcoins after all. just because they know who is using it, doesn't mean everyone has done something wrong. i really don't see what is wrong in using bitcoins if not used for illegal purposes. of course, paying taxes is something everyone should take care of.

The problem was not with bitcoins. The problem was with the source of cash used to buy bitcoins - they were obtained illegally. The question is whether Pankaj knew that the cash was obtained through illegal means. The police believe he knew.

I.e problem was with credit cards. Bitcoin ain't the culprit here. CCs are.

The other side is that if everyone was using Bitcoin, this kind of fraud cannot happen.

It can happen with only plastic money too. when there is no cash transaction.

With bitcoin there is way to hack system and steal all bitcoin. Nothing is 100% safe.