Regions

Indian Bitcoin exchanges to halt operations after banking regulator issues warning

December 27
11:41 AM 2013

According to a TechCrunch report, Bitcoin exchanges in India will be closing just days after Reserve Bank of India (RBI) issued a warning to users of the cryptocurrency on financial and security risks associated with the Bitcoin. Before then, RBI remained silent on the virtual currency in the last few weeks even though China has launched an initiative to shut down domestic exchanges, which resulted to Bitcoin's downward spiral early this month.

Prior to RBI's announcement, a small but growing Bitcoin community in India conducted its first conference to speak out about the Bitcoin, and appealed to the banking regulators of the company to recognize the usefulness of the Bitcoin similar to that of an actual currency. RBI had said that users of Bitcoin had not acquired any regulatory approvals at the moment, of which will lead to the investors exposed to several risks.

"There have been several media reports of the usage of VCs, including Bitcoins, for illicit and illegal activities in several jurisdictions. The absence of information of counterparties in such peer-to-peer anonymous/ pseudonymous systems could subject the users to unintentional breaches of anti-money laundering and combating the financing of terrorism (AML/CFT) laws", RBI stated.

Earllier this month, India was just beginning to see the rise of Bitcoin exchanges ad the thousand-member strong Bitcoin community was looking forward for Bitcoin to obtain more endorsements by merchants.

Indian website BuysellBitco.in, which offers BItcoin exchange services in the local currency, has already suspended its operations. BuysellBitco.in founder Mahim Gupta was unable to be reached for comment by TechCrunch, but has once said that his exchange's monthly turnover was around $200,000. Bitcoin traders that were also reached out by TechCrunch were also unavailable for comment perhaps because of their need to be cautious about making statements in lieu of RBI's comment about the virtual currency.

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