Bitcoins
emerged as a valuable investment in India in the year 2013. However,
the legality
of Bitcoins in India was always in doubts.
Nevertheless the e-commerce entrepreneurs in India kept on investing
and dealing in Bitcoins. They also forget to comply with Indian law,
including the cyber law of India.
For instance, the IT Act 2000 prescribes cyber
law due diligence in India and the Internet
intermediary liability in India. These cyber laws due
diligence and Internet Intermediary requirements squarely apply to
use of Bitcoins in India. Further, money laundering, foreign exchange
and security dealing laws also apply to Bitcoins dealings and trading
in India.
Meanwhile, China,
France,
Thailand,
etc have either regulated the use of Bitcoins or they have completely
banned them in their jurisdictions. But the Reserve Bank of India
(RBI) and Indian government kept
on sleeping over the issue. As a result the Bitcoins
frauds and crimes kept on increasing
in India.
As the pressure mounted, the RBI
cautioned users of virtual currencies against various risks
including legal
risks. Soon after the cautious advisory, the enforcement
directorate (ED) swung into action and raided two
Bitcoins websites and their offices. ED believes that
Bitcoins
money can be used for hawala transactions and funding terror
operations and this seems to be a legally plausible
explanation as well.
Actually, the Bitcoin website owners have themselves
put into trouble as they simply assumed that there are no legal
compliances that are required to be fulfilled. It is well established
that e-commerce
compliances in India are required to be fulfilled.
As on date the Bitcoins websites in India are under
regulatory
scanner and are vulnerable to all sorts of legal
actions. In fact, Seven
Digital Cash LLP is already facing legal risks for dealing
in Bitcoins in India.
The cyber
law trends of India 2013 by ICT law firm Perry4Law
has cautioned that Bitcoins websites may further face legal actions
if they fail to comply with Indian laws in the year 2014. We hope
that the Bitcoins saga would not end up in the prosecution of
Bitcoins entrepreneurs in India.
