{"id":29104,"date":"2014-03-01T10:38:49","date_gmt":"2014-03-01T10:38:49","guid":{"rendered":"http:\/\/ci027cfe70600b2697"},"modified":"2014-03-01T10:38:49","modified_gmt":"2014-03-01T10:38:49","slug":"india-bitcoin-regulation-1393670329","status":"publish","type":"post","link":"https:\/\/bitcoinmagazine.com\/business\/india-bitcoin-regulation-1393670329","title":{"rendered":"India Under Bitcoin Regulation? Or Not?"},"content":{"rendered":"
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Recently in December 2013, the Indian Central Bank (Reserve Bank of India, RBI<\/a>) decided to not regulate, and stated clearly that they lacked expert knowledge on the subject at that time. So they cautioned people not to trade in Bitcoin<\/a> or any other similar crypto-currency. A few days after, one exchange and a Bitcoin information (and dust holder) site closed down<\/a>, BuySellBitCo.in and rbitco.in, respectively. These actions were undertaken by the RBI\u2019s own Enforcement Department<\/a> (ED), which conducted the search and closure operations on two properties<\/a>. These incidents occurred immediately after the following RBI announcement.<\/p>\n

\u201cRegulation comes only when people are doing certain business and we come to understand that something wrong is happening. First of all we don\u2019t understand this subject.\u201d ~ KC Chakrabarty, RBI deputy governor<\/a><\/p>\n

This heavy-handed approach came with only the bank\u2019s statement that crypto-currency was to be free within India, unregulated, but free.<\/p>\n

RBI-ED sealed the home of Nilam Doctor during the raid conducted on 26th December 2013<\/p>\n

\u201cThe RBI<\/a> has no plans to come up with a regulatory framework for Bitcoins, the virtual currency, which has risen sharply in value in the past few months, a top official said.\u201d~ The Times of India<\/a><\/p>\n

You may guess that depends on one\u2019s given definition of \u2018free\u2019. With the world\u2019s second largest population at 1.237 billion<\/a>, nearly the majority of citizens in India are amongst the unbanked<\/a>, crypto-currency could do very well to get a proper foothold within the Indian sub-continent. An excellent piece on the regulatory framework within India and how it relates to Bitcoin and crypto-currency can be found here<\/a>.<\/p>\n

Summarizing that crypto-currency, under current regulation and legal framework, cannot be regulated, though with new regulation it may yet come under the umbrella of the political and banking powers. The RBI-ED then requested information on what these businesses actually do, the same businesses that they had just forced to close down. One of the affected businesses (rbitco.in), a website that explained the basics of Bitcoin and allowed registered customers to deposit \u2018dust\u2019 Bitcoin that customers gained via visiting various \u2018free Bitcoin\u2019 websites and promotions. The site allowed people to withdraw their dust once their account acquired a total of 0.5 or more. <\/p>\n

We can reveal that one of the individuals who had their house raided and closed (Nilam Doctor) ran this particular website, and after the property seizures the ED forwarded these questions:<\/p>\n