Unocoin Founder Arrest, RBI Policy Violation & More

Bengaluru: Cyber Crime Branch on Wednesday arrested Harish BV, co-founder of Unocoin. Arrested also involved seizing of several gadgets and INR 1.79 lakh in cash. The captured material involved two laptops, one mobile, three credit cards, five debit cards, one passport, five seals of the company and one cryptocurrency gadget.

The Cyber Crime department of the Central Crime Branch (CCB) gave the reason for the arrest in a statement to media that “The ATM kiosk installed by Unocoin in Bengaluru’s Kempfort Mall has not taken any permission from the state government and is dealing in cryptocurrency outside the remit of the law.”

The Finance minister Arun Jaitley in a finance budget stated, “cryptocurrency is not a legal tender.” In April, RBI released a notification saying that bank and institution under RBI should not deal with individual or companies who deal with cryptocurrency.

Statement from CCB is correct?

• Based on our research we found that the RBI website has not mentioned any information regarding the local/state permission to install an ATM.
• While it does seems that the state permission mentioned by CCB are in regarding the permit to operate in Karnataka and not in regards with ATM licensing.

Can Unocoin ATM Operate After the Permission Granted from State Authority?

• No, Unocoin will still require permission from RBI to Operate White Label ATM, under Payment and Settlement act 2007.
• As the ATM is not a Cryptocurrency ATM rather a INR Kiosk and It does require permission from RBI.

Read in depth story on Unocoin’s Violation of RBI White Label Policy?

Whereas Unocoin believes that it had followed the rules of Reserve Bank of India and stated that it is trying to accommodate “newer mechanisms and solutions to reduce the hurdle facing (regulatory) hurdles by the present central governments stand.”