India's first Bitcoin ATM was being installed in Bengaluru's Kempfort Mall one week before. The cyber crime police of Bengaluru has filed a case against Unocoin for establishing the ATM without any permission.
The police have arrested Harish BV, co-founder and chief technology officer of the Unocoin exchange, because he was operating the ATM which was installed by the firm on Oct 14.
As per the report, the Central crime branch has seized a teller machine, two laptops, a mobile, three credit cards, five debit cards, a passport, five seals of Unocoin company, a cryptocurrency device and Rs 1.8lakh. Harish was produced in the 1st ACMM Court in Bengaluru before he was taken into police custody.
Unocoin is one of the various cryptocurrency exchanges in India which has survived the bank ban imparted early by the Reserve bank of India (RBI), the country's central banking authority.
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All the domestic banks stopped providing financial services to the cryptocurrency exchanges, hence Unocoin released an ATM which will allow investors to instantly deposit Indian rupees to their accounts with the exchange.
The police also asserted that the Unocoin is not authorized to operate this type of ATM. Before a week, Alok Kumar, a commissioner from the Bangalore city said,
“They [Unocoin] did not have any license from RBI, Sebi [Securities and Exchange Board of India] or any other agency to carry out the bitcoin transaction. They were running it without obtaining any trade license from the BBMP [Bangalore government].”
In-return, Unocoin's co-founder and CEO Sathwik Vishwanath, rejected the accusation saying that,
“The [Finance] 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.”
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The ATM was not functioning and was also shifted from the Bengaluru's Kempfort Mall to other location after few reports of the media both welcoming and criticizing the installation of ATM. Unocoin was also planning to launch the same kind of ATMs in Mumbai and Delhi.