Digital currency

This tiny restaurant in Bengaluru accepts bitcoin as payment (but customers are yet to catch on)

The price of the cryptocurrency has been shooting up in recent months, hitting an all-time high of of nearly $3,000 last week.

For most Indians new to the concept of cryptocurrencies, the idea of making a transaction in real life using bitcoin seems vaguely illicit. It certainly doesn’t seem like the kind of thing you’d do on a Saturday afternoon, for instance, after devouring a Maharashtrian thali or snacking on a vada pav.

And yet, at the Suryawanshi restaurants in Bengaluru’s Indiranagar and Whitefield neighbourhoods, that’s exactly what you can do, because owner Kailash Suryawanshi accepts bitcoin as a mode of payment, alongside the usual cash, cards, and Paytm.

Suryawanshi, originally from the town of Kolhapur in Maharashtra, moved to the southern city way back in 2004 and worked in the used cars business. Nearly a decade later, after noticing the glaring lack of quality Maharashtrian food in the state, he launched his first eponymous restaurant in Whitefield, and followed that up with another in Indiranagar in 2015, gradually making a name for himself by serving authentic Kolhapuri thalis loaded with seafood and meat.

While the two outlets may not be the first offline establishments to transact in bitcoin in India (that honour reportedly belongs to a pizzeria in Mumbai, owned by a bitcoin enthusiast, which began accepting the cryptocurrency in 2013), they are certainly a rare breed. Though you can buy books or even movie tickets online using local bitcoin exchange apps, such as Zebpay, Coinsecure, and Unocoin, the digital currency remains largely unknown outside of a small, tech-savvy community in the country, and that applies to India’s Silicon Valley, too.

Tejas Suryawanshi, Kailash’s son, said his family was introduced to bitcoin in September last year and watched the value of its initial investment grow quickly in just a few months. In November, they decided to start accepting the digital currency at their restaurants to both raise awareness about the technology and increase the value of their investments. To woo tech-savvy Bengaluru locals, they put up stickers saying “bitcoin accepted here.” But so far, they’ve witnessed just one bitcoin transaction.

“There were a lot of people who came and clicked photos (of the sign) but apart from that no transactions,” 23-year-old Suryawanshi told Quartz, adding that one bill worth around Rs 500 was paid for using bitcoin a little over a month ago. Now, the bitcoin earned is worth over Rs 1,000, he said.

Bit by bit

The price of the cryptocurrency has been shooting up in recent months, hitting an all-time high of of nearly $3,000 last week. There’s a lot of different reasons for this, among them Japan’s decision in April to legalise bitcoin as a mode of payment. As a result, interest in the digital currency is growing, even in India, where Zebpay, for instance, said it was adding more than 2,500 new users every day.

Sandeep Goenka, co-founder of Zepbay, estimates that there are between 200,000 and 500,000 people investing in bitcoin in India. But most of them aren’t really using the cryptocurrency for purchases.

“Currently, most people are using (bitcoin) to make some alternate investments,” Goenka said in an email. “According to us, (the) state of bitcoins as a payment mode in India is still a couple of years away.”

That’s in part due to the confusing legal status of digital currencies in the country. While Goenka and others in the industry maintain that bitcoin is legal under the country’s existing laws, the government said in March that the Reserve Bank of India had not authorised the use of virtual currencies, and that they could put individuals at risk of breaching anti-money-laundering and terrorism financing laws.

Since April, the government has been examining the issue, and has even invited comments from the public on whether bitcoin and other digital currencies should be regulated or banned outright. The responses have mostly favoured legalisation. So far, however, digital currencies remain unregulated in India.

Without regulation, there’s no institutional authority to turn to for help if things go wrong. And that explains why many locals are still a little wary of bitcoin.

“Bitcoin is a very risky platform at the moment… nobody has control over it, so you don’t know from where the money is coming and where it is going,” Suryawanshi said. “There’s a fear of being hacked; people don’t think being online is good enough.”

In fact, earlier this month, a report on the website Factor Daily revealed a harrowing story of a Bengaluru techie who lost Rs 1.2 lakh ($1,860) in minutes after his Unocoin account was hacked. Since bitcoin users (and hackers) can choose to remain anonymous, and transactions can’t be reversed, it’s not easy to recover the currency once it’s lost.

Nevertheless, for the brave few who stick it out in India, there’s big money to be made, not to mention the promise of at least one offline reward: a delectable plate of authentic Maharashtrian food, and the cachet of saying you paid for it with bitcoin.

This article first appeared on Quartz.

We welcome your comments at letters@scroll.in.
Sponsored Content BY 

Behind the garb of wealth and success, white collar criminals are hiding in plain sight

Understanding the forces that motivate leaders to become fraudsters.

Most con artists are very easy to like; the ones that belong to the corporate society, even more so. The Jordan Belforts of the world are confident, sharp and can smooth-talk their way into convincing people to bend at their will. For years, Harshad Mehta, a practiced con-artist, employed all-of-the-above to earn the sobriquet “big bull” on Dalaal Street. In 1992, the stockbroker used the pump and dump technique, explained later, to falsely inflate the Sensex from 1,194 points to 4,467. It was only after the scam that journalist Sucheta Dalal, acting on a tip-off, broke the story exposing how he fraudulently dipped into the banking system to finance a boom that manipulated the stock market.

Play

In her book ‘The confidence game’, Maria Konnikova observes that con artists are expert storytellers - “When a story is plausible, we often assume it’s true.” Harshad Mehta’s story was an endearing rags-to-riches tale in which an insurance agent turned stockbroker flourished based on his skill and knowledge of the market. For years, he gave hope to marketmen that they too could one day live in a 15,000 sq.ft. posh apartment with a swimming pool in upmarket Worli.

One such marketman was Ketan Parekh who took over Dalaal Street after the arrest of Harshad Mehta. Ketan Parekh kept a low profile and broke character only to celebrate milestones such as reaching Rs. 100 crore in net worth, for which he threw a lavish bash with a star-studded guest-list to show off his wealth and connections. Ketan Parekh, a trainee in Harshad Mehta’s company, used the same infamous pump-and-dump scheme to make his riches. In that, he first used false bank documents to buy high stakes in shares that would inflate the stock prices of certain companies. The rise in stock prices lured in other institutional investors, further increasing the price of the stock. Once the price was high, Ketan dumped these stocks making huge profits and causing the stock market to take a tumble since it was propped up on misleading share prices. Ketan Parekh was later implicated in the 2001 securities scam and is serving a 14-years SEBI ban. The tactics employed by Harshad Mehta and Ketan Parekh were similar, in that they found a loophole in the system and took advantage of it to accumulate an obscene amount of wealth.

Play

Call it greed, addiction or smarts, the 1992 and 2001 Securities Scams, for the first time, revealed the magnitude of white collar crimes in India. To fill the gaps exposed through these scams, the Securities Laws Act 1995 widened SEBI’s jurisdiction and allowed it to regulate depositories, FIIs, venture capital funds and credit-rating agencies. SEBI further received greater autonomy to penalise capital market violations with a fine of Rs 10 lakhs.

Despite an empowered regulatory body, the next white-collar crime struck India’s capital market with a massive blow. In a confession letter, Ramalinga Raju, ex-chairman of Satyam Computers convicted of criminal conspiracy and financial fraud, disclosed that Satyam’s balance sheets were cooked up to show an excess of revenues amounting to Rs. 7,000 crore. This accounting fraud allowed the chairman to keep the share prices of the company high. The deception, once revealed to unsuspecting board members and shareholders, made the company’s stock prices crash, with the investors losing as much as Rs. 14,000 crores. The crash of India’s fourth largest software services company is often likened to the bankruptcy of Enron - both companies achieved dizzying heights but collapsed to the ground taking their shareholders with them. Ramalinga Raju wrote in his letter “it was like riding a tiger, not knowing how to get off without being eaten”, implying that even after the realisation of consequences of the crime, it was impossible for him to rectify it.

It is theorised that white-collar crimes like these are highly rationalised. The motivation for the crime can be linked to the strain theory developed by Robert K Merton who stated that society puts pressure on individuals to achieve socially accepted goals (the importance of money, social status etc.). Not having the means to achieve those goals leads individuals to commit crimes.

Take the case of the executive who spent nine years in McKinsey as managing director and thereafter on the corporate and non-profit boards of Goldman Sachs, Procter & Gamble, American Airlines, and Harvard Business School. Rajat Gupta was a figure of success. Furthermore, his commitment to philanthropy added an additional layer of credibility to his image. He created the American India Foundation which brought in millions of dollars in philanthropic contributions from NRIs to development programs across the country. Rajat Gupta’s descent started during the investigation on Raj Rajaratnam, a Sri-Lankan hedge fund manager accused of insider trading. Convicted for leaking confidential information about Warren Buffet’s sizeable investment plans for Goldman Sachs to Raj Rajaratnam, Rajat Gupta was found guilty of conspiracy and three counts of securities fraud. Safe to say, Mr. Gupta’s philanthropic work did not sway the jury.

Play

The people discussed above have one thing in common - each one of them was well respected and celebrated for their industry prowess and social standing, but got sucked down a path of non-violent crime. The question remains - Why are individuals at successful positions willing to risk it all? The book Why They Do It: Inside the mind of the White-Collar Criminal based on a research by Eugene Soltes reveals a startling insight. Soltes spoke to fifty white collar criminals to understand their motivations behind the crimes. Like most of us, Soltes expected the workings of a calculated and greedy mind behind the crimes, something that could separate them from regular people. However, the results were surprisingly unnerving. According to the research, most of the executives who committed crimes made decisions the way we all do–on the basis of their intuitions and gut feelings. They often didn’t realise the consequences of their action and got caught in the flow of making more money.

Play

The arena of white collar crimes is full of commanding players with large and complex personalities. Billions, starring Damien Lewis and Paul Giamatti, captures the undercurrents of Wall Street and delivers a high-octane ‘ruthless attorney vs wealthy kingpin’ drama. The show looks at the fine line between success and fraud in the stock market. Bobby Axelrod, the hedge fund kingpin, skilfully walks on this fine line like a tightrope walker, making it difficult for Chuck Rhoades, a US attorney, to build a case against him.

If financial drama is your thing, then block your weekend for Billions. You can catch it on Hotstar Premium, a platform that offers a wide collection of popular and Emmy-winning shows such as Game of Thrones, Modern Family and This Is Us, in addition to live sports coverage, and movies. To subscribe, click here.

This article was produced by the Scroll marketing team on behalf of Hotstar and not by the Scroll editorial team.