Second co-founder of Unocoin is arrested for setting up India’s first bitcoin ATM

A day after the Cyber Crime Police arrested Harish BV, a Co-founder of crypto-exchange Unocoin, a second co-founder of the startup, Sathvik Vishwanath, has been arrested.The arrests come a week after Unocoin launched its first physical kiosk in Bengaluru, and seem to have sent India's bitcoin dream crashing.

After the first arrest, the police had registered a case against Unocoin, stating that the setup was illegal. According to reports, Unocoin had installed its first cryptocurrency kiosk, or ATM, in a mall on Old Airport Road without taking necessary permissions from the state government.

Media reports said Sathvik is now imprisoned in police custody for seven days, with officials seizing a laptop and cellphone from him.

The police stated that they suspect Sathvik may have destroyed evidence, including online transaction trails and customer details stored in laptops. Speaking to the Times of India, DCP (Crime) S Girish said the RBI has stated that cryptocurrencies are illegal.

However, in a statement yesterday, 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 cryptocurrencies are not 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 CCB began investigating Unocoin while probing a complaint by a Bengaluru-based businessman who claimed to have been conned by Pramod Kullar, a representative of a financial firm. Though Pramod had no connection with Unocoin, the investigation led the cops to the company.

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