India’s bitcoin ATM dreams crash; Unocoin founder arrested a week after setting up kiosk

A week after crypto-trading startup Unocoin launched its first physical kiosk, the Cyber Crime Police arrested the company’s Co-founder Harish BV, and registered a case against the company.

The police said the set up was illegal as it did not have any approvals according to news reports. Reports also said officials seized a teller machine, two laptops, a mobile phone, three credit cards, five debit cards, a passport, five seals of Unocoin, a crypto exchange device and Rs 1.8 lakh in cash.

News reports said Harish had been presented before a metropolitan magistrate, and was remanded to police custody for a week.

Authorities said Unocoin set up the automated teller machine flouting the regulations laid down by the Reserve Bank of India, and the physical kiosk was a peer-to-peer platform to buy and sell bitcoin. Unocoin also permitted cash transactions at the kiosk subject to some limits.

The minimum amount for deposit and withdraw was Rs 1000, and in multiples of Rs 500, the police said.

Set up at Bengaluru's Kemp Fort Mall, the machine was later moved. The company said that its teller machine was not yet operational, and alleged negative media reports had painted the kiosk's operations in a poor light.

Swaroop Anand, the Advocate representing directors of Unocoin, said,

"The matter is hitherto sub judice and hence, it is best if we refrain from commenting further. There has been some misunderstanding, as crypto-currencies are not the legal tender but it is still not illegal to transact in the same. We have always persevered to spread the right information and educate our users on the risks involved." 

The official handle of Unocoin tweeted,

“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. The machine has been temporarily moved from its original place of installation.”

The company also had plans to install similar machines in Mumbai and Delhi in a couple of weeks.