Bitcoins Website Owners And Entrepreneurs Must Comply With Indian Law To Stay Legal: Perry4Law

Bitcoins Website Owners And Entrepreneurs Must Comply With Indian Law To Stay Legal Perry4LawAmong vast legal uncertainty among Bitcoin websites and entrepreneurs there seems to be some hope. According to Perry4Law, the leading techno legal law firm of Asia, the Reserve Bank of India (RBI) has just fell short of declaring that use of Bitcoins in India is illegal. However, RBI has clearly indicated that use of Bitcoins in India is subject to Financial, Security and Legal Risks.

Some have interpreted this advisory of RBI as a free license to engage in Bitcoin trading and business in India. However, in their zeal to earn money they have forgotten that RBI has clearly mentioned that use and dealing of Bitcoins in India is subject to “legal risks”.

RBI has clearly mentioned that 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 has also stated that it is presently examining the issues associated with the usage, holding and trading of VCs under the extant legal and regulatory framework of the country, including Foreign Exchange and Payment Systems laws and regulations.

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.

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 fact is that the legality of Bitcoins in India was always in doubts. The cyber law trends of India 2013 by ICT law firm Perry4Law has cautioned (PDF) that Bitcoins websites may further face legal actions if they fail to comply with Indian laws in the year 2014.

To say the minimum Bitcoins are governed by many laws that are indirectly applicable to its dealings and transactions in 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.

The Bitcoins website owners and entrepreneurs must comply with Indian laws to stay legal. Otherwise the prosecution of these websites and Bitcoin owners would continue in the year 2014 as well.

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1 Response to Bitcoins Website Owners And Entrepreneurs Must Comply With Indian Law To Stay Legal: Perry4Law

  1. Pingback: Bitcoins Legal Violations Continues In India As Tea Traders Violate Indian Laws « The Bitcoin Channel

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