Bangalore police confiscated a cryptographic machine operated by Unocoin, the local cryptocurrency exchange, a few weeks after its installation.
The Times of India reported that Harish Bau (Harish BV), co-founder and technical director of Unocoin, was arrested on Tuesday for servicing an ATM installed in a shopping center on October 14.
According to the report, the local police department for combating organized crime confiscated a cryptographic machine, two laptops, a mobile phone, three credit cards, five debit cards, a passport and Indian rupees worth about $ 2,500.
Unocoin is one of several cryptocurrency exchanges in India that has survived the banking ban initiated this spring by the Reserve Bank of India (RBI).
Since local banks have stopped providing financial services for cryptocurrency exchanges, Unocoin has established a cryptographic system that will allow investors to directly place Indian rupees on their accounts on the exchange. Last week, the company said it plans to install several more cryptomats in Mumbai and Delhi.
At the same time, the police said that Unocoin is not authorized to manage ATMs of this type. Bangalore Mirror quoted Alok Kumar, Bangalore City Police Commissioner:
“Unocoin did not have a license from RBI, SEBI (Securities and Exchange Board of India) or any other agency to carry out Bitcoin transactions. They ran an ATM without obtaining any trading license from BBMP (Government of Bangalore).”
However, co-founder and CEO of Unocoin, Sathvik Viswanath, rejected this accusation:
“The statement of the Minister of Finance was clear: cryptocurrencies are not legal tender in India. They did not say "illegal means of payment." This is a huge difference. This means that you yourself bear the risk for your investment, and there is no regulation for the industry.”
Last week, it was reported that India proposes to ban the storage of unregulated cryptocurrency assets, and in August it was reported that the government of the country would introduce rules for regulating the cryptocurrency industry by the end of this year.