The Indian police has seized Unocoin’s Bitcoin ATM and arrested a company co-founder on charges of illegal business activities.

Just days after cryptocurrency exchange Unocoin installed India’s first Bitcoin ATM in Bengaluru, the city’s cyber crime police seized the kiosk and arrested the company’s co-founder Harish BV on charges of running the business “outside the remit of the law,” multiple local media sources revealed on Wednesday.

“They did not have any licence from RBI, Sebi or any other agency to carry out the bitcoin transaction. They were running it without obtaining any trade license from the BBMP,” Alok Kumar, a commissioner from the Bangalore city police, said as quoted by Bangalore Mirror.

According to the reports, the Central Crime Branch (CCB) of the local police force have also seized two laptops, a mobile, three credit cards, five debit cards, a passport and Indian rupees worth about $2,500. After Harish’s arrest, he was presented at the court of the Additional Chief Metropolitan Magistrate and was further remanded in police custody for seven days. The authorities said more arrests are likely and made an appeal to the public “not to be lured by the prospect of making huge profits” through crypto.

Installed in Bengaluru’s Kempfort Mall earlier this month, Unocoin’s ATM had both a trading and exchange platform. It allowed registered Unocoin customers to buy or sell up to 10 Bitcoins a day. All transactions were made in Indian rupees only, after which they could be exchanged into a currency of the consumer’s choice.

The machine was set up despite India’s recent crackdown on cryptocurrencies. In April, the Reserve Bank of India (RBI) issued a circular to all financial institutions including banks, prohibiting them from providing services to companies in the digital assets sector. The decision came into force on July 5.

Referring to India’s minister of finance Arun Jaitley’s 2018-19 budget speech, Unocoin’s co-founder, Sathvik Viswanath was quoted by the Times of India as saying:

“The minister’s statement was clear: Cryptocurrencies are not legal tender in India. He did not say ‘illegal tender.’ There’s a huge difference. It means you bear the risk of your investment and there’s no regulation for the industry.”

Viswanath further stated that the company had been getting a lot of bad publicity ever since the Finance Minister announced its ban earlier this year. The influx of criticism naturally did not go unnoticed by the company. A Twitter statement published October 21 read:

“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.”

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