The police in Karnataka’s capital Bengaluru on Tuesday arrested the co-founder of a company that installed a bitcoin kiosk in the city’s Kemp Fort Mall last week, the Hindustan Times reported. The police closed the kiosk and said Harish BV, the 37-year-old co-founder of Unocoin, had been arrested as his company had not taken the required permissions to set it up.
“The kiosk was set up without any of the requisite permissions either from the government or the Reserve Bank of India,” said Additional Commissioner of Police (Crime) Alok Kumar. “We have booked him under Section 420 of the Indian Penal Code and also under provisions of the Information Technology Act.” Section 420 deals with cheating and dishonestly inducing delivery of property.
Bitcoin is a type of cryptocurrency that allows customers to trade digital currencies for other assets or different digital currencies. They are largely unregulated at present.
The police have seized a cryptocurrency device, two laptops, a mobile phone and Rs 1.79 lakh in cash from Harish, who is a resident of Jayanagar West in Tumakuru, reported The New Indian Express.
In his Budget speech earlier this year, Union Finance Minister Arun Jaitley said the Centre would crack down on the use of cryptocurrencies in the country. The virtual currencies are being used to sponsor illegal transactions, he added. In December, the government and the Reserve Bank of India warned users against using virtual currencies. The government even compared them to ponzi schemes and warned traders of the risks, including “permanent loss of money”.