[2013-27-12] India cracks down on bitcoin exchange

[spndr7]

http://www.dnaindia.com/india/report-first-time-in-the-country-ed-raids-a-bitcoin-seller-in-ahmedabad-1941187

On Thursday, ED raided the premises of Mahim Gupta in Bopal area of the city who provides trading platform through his website -‑ buysellbit.co.in. During the preliminary investigation, the ED found that it is in clear violation of Foreign Exchange Management Act (FEMA) rules of the country as central bank does not provide permission to indulge in such transactions.

[BTCLuke]

This is probably the worst thing imaginable for India.   

Just 2 weeks ago India had its' first conference: http://www.globalbitcoinconference.com/

BFL's Josh Zerlan and Johann Gevers of OT/Monetas both spoke there... Alongside Mahin Gupta.

From this article:

On Thursday, ED raided the premises of Mahim Gupta in Bopal area of the city who provides trading platform through his website -‑ buysellbit.co.in. During the preliminary investigation, the ED found that it is in clear violation of Foreign Exchange Management Act (FEMA) rules of the country as central bank does not provide permission to indulge in such transactions.

A few days after the conference, India warned its' citizens that bitcoin is unsafe. This caused the exchanges, including Mahins to shut down tuesday.

Specifically mentioned in this article:

Another operator, buysellbitco.in, informed investors that it is suspending buy and sell operations until it can outline a clearer framework with which to work.

“This is being done to protect the interest of our customers and in no way is a reflection of bitcoin’s true potential or price,” buysellbitco.in said in a statement posted on its website.

So we have to conclude that if he was on top of the game and complying with rules but then they raided him soon thereafter, India is now officially far more aggressive against bitcoin than any other country on earth.

They're even beating out North Korea now... Such savages!

[bryant.coleman]

My Indian friend called me a few hours ago, and told me that he is deleting his Localbitcoins.com account. His bank accounts were linked to it, and he is now fearful that the police might come after him. But he also told me that there are still Indian users who are selling Bitcoins using that site.

[LiteCoinGuy]

bitcoin is not illegal in india. why should it? but when you open a business and dont care about laws and regulation, you get punished.

[notthematrix]

https://localbitcoins.com/ select India , don't see any problems to get bitcoins.

Dont see any way they can stop it , annyway , in agentina rules are worse , but still you can get them

[spndr7]

bitcoin is not illegal in india. why should it? but when you open a business and dont care about laws and regulation, you get punished.

Bitcoin is not illegal in India,but fiat money laundering (through the point, where conversion of bitcoin to rupees takes place) is certainly illegal if established norms are not followed.

[mpradeep]

bitcoin is not illegal in india. why should it? but when you open a business and dont care about laws and regulation, you get punished.

Bitcoin is not illegal in India,but fiat money laundering (through the point, where conversion of bitcoin to rupees takes place) is certainly illegal if established norms are not followed.

Can you please clarify on what kind of norms to be followed if i am bitcoin trader while converting BTC to indian Rupees.

[dc0ded]

bitcoin is not illegal in india. why should it? but when you open a business and dont care about laws and regulation, you get punished.

Bitcoin is not illegal in India,but fiat money laundering (through the point, where conversion of bitcoin to rupees takes place) is certainly illegal if established norms are not followed.

Can you please clarify on what kind of norms to be followed if i am bitcoin trader while converting BTC to indian Rupees.

I think its a very dark zone. Laws here in India are very unclear on many things. I think you need a panel of expert lawyers to frame proper guidelines. Else the authorities can always use the laws according to their convenience. And when you are following government guidelines in India things might get more tougher for you... Any business paying income taxes knows it very well. Once the authorities know that you are a bitcoiin trader you will be the scape goat. Be ready for hundreds of audits, notices and explanations.

[justusranvier]

My Indian friend called me a few hours ago, and told me that he is deleting his Localbitcoins.com account. His bank accounts were linked to it, and he is now fearful that the police might come after him. But he also told me that there are still Indian users who are selling Bitcoins using that site.

I doubt that the owners of a site in Finland are giving customer information to the authorities in India. There's no means by which they could issue a subpoena.

Only the USSA gets to effectively exercise extraterritorial jurisdiction.

[lumierre]

bitcoin is not illegal in india. why should it? but when you open a business and dont care about laws and regulation, you get punished.

Bitcoin is not illegal in India,but fiat money laundering (through the point, where conversion of bitcoin to rupees takes place) is certainly illegal if established norms are not followed.

Can you please clarify on what kind of norms to be followed if i am bitcoin trader while converting BTC to indian Rupees.

I think its a very dark zone. Laws here in India are very unclear on many things. I think you need a panel of expert lawyers to frame proper guidelines. Else the authorities can always use the laws according to their convenience. And when you are following government guidelines in India things might get more tougher for you... Any business paying income taxes knows it very well. Once the authorities know that you are a bitcoiin trader you will be the scape goat. Be ready for hundreds of audits, notices and explanations.

Don't let them rape you. You guys need to fight back. Bitcoin isn't a currency issued by any nation so legally they don't have any power over it and the people behind it. It's just something a group of people decided has value. What if next time they arrest you for trading eggs? Stand up and fight fo you rights.

[bryant.coleman]

I doubt that the owners of a site in Finland are giving customer information to the authorities in India. There's no means by which they could issue a subpoena.

Only the USSA gets to effectively exercise extraterritorial jurisdiction.

Better be safe now, than sorry later.

The Indian Income Tax is notoriously corrupt and biased. If they get a stick to beat you, then you will lose your life's earnings. Going for appeals won't help. It will take 10-15 or even 25 years to get a court date.

[seriouscoin]

I doubt that the owners of a site in Finland are giving customer information to the authorities in India. There's no means by which they could issue a subpoena.

Only the USSA gets to effectively exercise extraterritorial jurisdiction.

Better be safe now, than sorry later.

The Indian Income Tax is notoriously corrupt and biased. If they get a stick to beat you, then you will lose your life's earnings. Going for appeals won't help. It will take 10-15 or even 25 years to get a court date.

Not if the citizens keep their life saving in BTC..... What the fck can they do? order to pay in ruppees? Good luck with that....

I honestly hope the Indians will be smart about this.

[bryant.coleman]

Not if the citizens keep their life saving in BTC..... What the fck can they do? order to pay in ruppees? Good luck with that....

I honestly hope the Indians will be smart about this.

This is going to be their modus operandi:

1. First they will arrest the exchange owner. Then they will extract all the trade logs, complete with the Bitcoin wallet ids and linked bank accounts.

2. They will calculate how much BTC was bought / sold by each of the users.

3. Since they now have the bank accounts of the users, the authorities will contact them and ask them to pay VAT (can be 12.5% or can be 20%) + penalty for their purchases and Short Term Caps Gains (30%) + Penalty for gains from sales.

4. If you don't pay the penalty, they will seize your assets.

[LiteCoinGuy]

bitcoin is not illegal in india. why should it? but when you open a business and dont care about laws and regulation, you get punished.

Bitcoin is not illegal in India,but fiat money laundering (through the point, where conversion of bitcoin to rupees takes place) is certainly illegal if established norms are not followed.

yep but in the future we will see better exchanges that comply with the laws, iam pretty sure.

[bitgold]

Not if the citizens keep their life saving in BTC..... What the fck can they do? order to pay in ruppees? Good luck with that....

I honestly hope the Indians will be smart about this.

This is going to be their modus operandi:

1. First they will arrest the exchange owner. Then they will extract all the trade logs, complete with the Bitcoin wallet ids and linked bank accounts.

2. They will calculate how much BTC was bought / sold by each of the users.

3. Since they now have the bank accounts of the users, the authorities will contact them and ask them to pay VAT (can be 12.5% or can be 20%) + penalty for their purchases and Short Term Caps Gains (30%) + Penalty for gains from sales.

4. If you don't pay the penalty, they will seize your assets.

Sounds like straightly coming from Nazi's playbook.

What a shame for a "democratic" regime. 

Thank God for: a) I am not a citizen of that country, b) I am not a female citizen from that country.

[stompix]

Change the title to India cracks on illegal bitcoin exchange.

Also , nobody cares about them and their 2 BTC volume.

[ArticMine]

Bitcoin will survive this. Seriously! These are among the reasons why:

http://coinmill.com/BTC_PKR.html
https://bitcoinspakistan.com/
https://localbitcoins.com/country/PK
http://bitcoinpk.com/

Edit: This "divide and conquer argument" is also the reason why governments around the world will never be able to stamp out Bitcoin.

[bryant.coleman]

Change the title to India cracks on illegal bitcoin exchange.

Also , nobody cares about them and their 2 BTC volume.

That is negative attitude. You can't blame the Indians for the actions of its corrupt government, although they were the ones who elected it to the office.

And another thing. Although the current volumes from India is microscopic... don't forget that India is having a population of 1.3 billion and is one of the most rapidly growing economies in the world. 

[stompix]

Change the title to India cracks on illegal bitcoin exchange.

Also , nobody cares about them and their 2 BTC volume.

That is negative attitude. You can't blame the Indians for the actions of its corrupt government, although they were the ones who elected it to the office.

And another thing. Although the current volumes from India is microscopic... don't forget that India is having a population of 1.3 billion and is one of the most rapidly growing economies in the world.  

Yeah , on paper...
I saw through the last years the myth of the BRICS falling apart.
China with is fake numbers and currency manipulation , Russia with its' citizen running away to Europe, India with hundreds of thousands of people starving each year, Brazil who can't afford both  a world championship and normal healthcare and South Africa which in 30 years will have more people infected with HIV than healthy.

Face it , the bitcoin trained is fueled by the western countries.
If the Eu does the same as china and India , we can count bitcoin in cents for a few months.

[bryant.coleman]

Yeah , on paper...
I saw through the last years the myth of the BRICS falling apart.
China with is fake numbers and currency manipulation , Russia with its' citizen running away to Europe, India with hundreds of thousands of people starving each year, Brazil who can't afford both  a world championship and normal healthcare and South Africa which in 30 years will have more people infected with HIV than healthy.

Well.... some of the facts are true. The others are not.

1. Chinese Yuan is getting stronger every day, whether it is due to currency manipulation or not.

2. Russian citizens are not running away to Europe. They were, until 4 or 5 years ago. Right now, Russia is having a positive net immigration.

3. Millions of people are starving in India. But things will change if the opposition is voted in to power in 2014.

4. Brazil is a lawless country, where you can cut down forests and massacre the indigenous tribals without any consequences. So no comments.

5. South Africa has suffered from massive brain drain and crime wave. Not going to be one of the top economies in the future.