Topic: Can Bitcoins be regulated by RBI? What are the consequences going to be? (Read 3327 times)

We can surely look into the whole transaction and the applicable provisions on the same. Provisions, formalities, licenses and permission regarding the establishment of a ATM needs to be looked into then we can try and bifurcate the same in a manner that bitcoin vending machine are classified differently. It is a long query and wholesome opinion I can look into it. You can PM me.

Hmmm this make sense to a certain extent. Just haven't thought this way, still will recommend a legal consultation.

Regards,
Amit

Its not a ATM it a vending machine, and you are looking at this  as if a person is  doing to stuff a vending  machines wit more than 1 crore in cash and  transferring it out.

Vending machines wont be able to handle more than 20k transaction a  day, that is taking into account security and physical space.

in your terms i can buy a soda bottle off a vending  machine take it abroad and sell that soda for cash and poof laundered money worth a soda. I'm a genius.

I am still a little doubtful on that. Even if the machine is only dispensing the btc on acceptance of cash , there is no way to stop somebody to covert their black money to btc and transfer out of india. And there is no way to KYC the person.

I feel there is more study to be needed to implement btc atm in India.

This is just a thoughtful opinion, legal experts can provide a better solution.

Regards,
Amit

I am interested in the new product (Bitcoin vending machine) from Skyhook - www.projectskyhook.com so will that be legal to establish one in India?? Mr. Kanishk can you look into this?

Yup you can have vending machines. so you will be only selling bitcoins  no purchase. 

We can definitely look into it. You may contact us for providing opinion on the same, as it requires extensive research.

Ok if the Bitcoin ATMs are not allowed as they are not entitled as currency yet in India, we can establish Bitcoin vending machines right now. Inserting fiat and taking bitcoin transferred. Is it legally acceptable in present conditions?

hahaha....Samuel I understand that you are not enquiring the same about yourself but for start-up guys. See I would not be able to tell the amount of fee we would charge as it totally depends on the nature of work and the involvement the client wants us to put in. But I am sure I can provide my legal services to the start-ups keeping in mind that they are setting up their businesses. If they are comfortable they can also pay in bitcoins. Let me know about the start-up guys who require my services, would be glad to be of assistance. Hope you know my contact details

My Bitcoindream friend I would require more facts than that and would also need to understand the working, in whole. If you want we can look into the whole business model you are working on and suggest you how to deal with it and draft necessary documents for you as well. PM me if you require legal assistance on that!!! 

Agarwal, I have some pretty strong backing, so this is not for me at the moment.
I do think that this is a good service and not too many people have come into the forums to offer the same, even though there are several legal houses in India, who are working on Bitcoin.
Wish you all the best and you can count on me to help back any venture that you bring forward

Samuel I am a bit confused whether you are asking about legal consultation for my services or fighting it after RBI refusal. For the former our consultation and opinions can be acquired by paying in bitcoins as well as by normal mode. We are also looking into various prospectives for the start ups in form of VC funding. Secondly, for the latter it will be hard to tell about the legal fee structure to fight it out in courts but, I think indian counterpart of this forum should definitely create a pool of money for any such anomaly that comes its way because in supreme court this kind of matter would definately have to be argued by a senior advocate and they charge quite well.

A quick suggestion, most of the startups are wary about legal fees that can be incurred with such a consultation.
It would be awesome if people also had some idea of what they may face in the event that they need to go all the way.

+1

Thank u so much Kanishk for giving us the details from legal perspective. If we consider the case of LocalBitcoins.com or BitQuick.in, they work as escrow. They just hold Bitcoin and FIAT get transferred directly from buyer's account to seller's account. In this case, do u think as per Indian law, it is required to make people register with all the documents as per AML and KYC procedures ?

Yes. Bitcoin can be regulated by RBI only and they may regulate it or ban it. BBut they would be required to do so with proper reasoning and that is for sure.

In case of any clarification please do let us know.
Regards
--
Kanishk Agarwal
Advocate
CriTaxCorp
Criminal-Taxation-Corporate
www.critaxcorp.com
+919971666252
+919999966252

I would like to answer a few questions, in brief, from legal perspective and as per my understanding.

Q1-: Can bitcoin ATM be established in India?
Ans-: Bitcoin ATM cannot be established in India. ATM are being regulated by RBI guidelines and the reason why exchanges are being operated and not ATM is that bitcoin is not covered under Securities or Currency (As of date). However, RBI do have power to regulate the same as per power vested with them under the preamble. We can look into it for anyone who is interested to deeply understand the regulations behind it.

Q2-: Whether any exchange is working legally?
Ans-: I would not be able to comment on the working of any other exchange as of now. We are providing our legal services to one of our clients who has recently opened bitcoin exchange in india namely millibits. The Url is

https://millibits.in

We have advised our client to make people register with all the documents as per AML and KYC procedures.

Q2-: Petition for allowing bitcoin in India.
Ans-: I would surely not recommend it and the court would also not entertain it as something which has not been declared illegal yet. However, if RBI refuses to allow or regulate or makes it illegal, then doors of court can surely be knocked and I would surely be a part of it.

Q3-: Whether bitcoins are commodities?
Ans-: Bitcoins are not covered under any definition. We have studied the same and also given legal opinions to our client. What it is, is very elaborative and I cant explain it here.

Q4-: Can and will RBI regulate it?
Ans-: That is upto RBI and they need to know and formulate their stand on the same. However, they are takin tie because they know they eed to provide reasoning for refusing to regulate it.


I hope my replies or inputs can be useful to all the people in the trailing threads.

Regards
--
Kanishk Agarwal
Advocate
CriTaxCorp
Criminal-Taxation-Corporate
www.critaxcorp.com
+919971666252
+919999966252

I do not believe that it is correct to ask permission for a human right.
There are licences and legalities that need to be obtained, but there are routes for that.
This petition will not originate from me.

I request someone to take a step ahead and file an online petition for considering Bitcoins in India. I am sure, India is going to loose a lot of the global economic rally if does not act swiftly regarding the regulation of Bitcoins. @Benson please start an online petition.

It does not mater whom FMC reports, what matters is their jurisdiction. Normally the definition of such terms like "commodity" comes as very generic and can easily accommodate almost any thing or, as in India normally the way it works, they can simply say that Bitcoin comes in their jurisdiction and if you disagree you have to challenge it in court.

Frankly speaking Bitcoin can not be regulated by any one body, its how you use it, how your application, business model defines it and provides instruments to end users to interact with is important and depending on that various bodies may have authority to regulate and approve business models. As a naive example IRDA will regulate any product related to insurance sector, does not matter related to Bitcoin or not. Same way if your business model defines it as commodity trading which allows users to speculate on it with exchange type of business model, FMC may come in. But strictly this is all speculation and nothing else. You must get legal counsel for your business model and, IF AND ONLY IF, ask for clarification, approval etc from authority if it requires one.

Regards

So its still not clear where Bitcoin is?

Its like gold, silver; but is not government controlled.

Gold, Silver or other metals and agriculture Commodities trading in MCX and NCDEX, all come under FMC. and stock market comes under SEBI.

What about Gold, Silver and other metal selling on MCX & NCDEX ? Does it come under FMC too ?

fmc can come into place in the event of volatility is what I am told.

Edit: This would not come up though as Bitcoin is not controlled by any government.

In India, commodity futures /forwards is regulated by FMC( Forward markets committee), which is under Minister of Agriculture. How it possible, agriculture ministry regulate Bitcoin?

Hence Bitcoin will never be considered as commodity.

No, it is not illegal except where Bitcoin is illegal
Everyone else says its OK

Agreed. Stop typing in Caps and do not use red in everything.

Why do you keep posting in red caps? Can't you type normally like others?

BUT HAVING A BITCOIN ATM IS NOT ILLEGAL RIGHT?

We can cash out our riches after 12 months then

That or we move to Hong Kong.

If govt did not change, it would have been faster.

It has to. They have taken notice and action in the last 12 months, something has to give in the next 12
Consider it an optimistic number.

Maybe they will listen many polling stations so if enough people petition there could be a change.

Read Benson 12 more months where did that quote come from?

Has not been defined.
RBI have the powers to get Bitcoin under their wing, but doing something like that would be the same as legalizing it outright.

12 months more at the most and we should have a better framework to work under.

They have?

So Bitcoin is just like any commodity in India then?

RBI will not care till we are doing trading or holding Over the Counter. But when time for vending machine/ATM they will really take step to stop that.

RBI have already stated that they are not an authority for Bitcoin. I do not know why everyone is still chasing them.

Benson, using anything as currency is regulated through RBI. RBI dont allow even easily cash card, Cash card also has limit like 5000 so how RBI will allow Bitcoin which value more then 35k Per Bitcoin.

There are many other features in bitcoin which will make it better than a commodity but govt dont like them usually

BITCOINS WILL BE ACCREDITED AS COMMODITY ONLY IN MY OPINION. BECAUSE IT IS LIMITED IN QUANTITY AND CAN BE MINED ANYWHERE. THESE ARE THE PROPERTIES OF COMMODITIES EXCLUSIVELY. WHAT ARE YOUR OPINIONS?

There is a workaround for ATM in India.
Automated Vending machines are far less regulated. This could be the approach that works.

However, if RBI does not classify BTC as a commodity, this will not work.

If you dont know setting up ATM is not an easy process in India, you need to take permission from RBI for setting ATM.

If btcxindia.com can start a realtime btc-exchange, why aren't they planning to put up some ATM in highly populated places?

see this post : http://blog.coinbase.com/post/87144103922/update-on-edu-giveaway-over-20-000-college-students

After all the seizure, what happened? Whats the status now?

My few Bitcoins are in storage, but if I want to cash out someday I need to know how the government sees it.

Great Initiative if you plan to do so, must keep in mind that there are not many people indulged in bitcoins here in India so its gonna be hard for you to manage that ATM. and apart from that RBI has not yet cleared their stand on btc.

Why sir ? why you think so..?

WHY NOT? IF BITCOINS ARE NOT ILLEGAL IN INDIA, THEN WHY CANT I PUT AN ATM? THERE ARE EXCHANGES WHY NOT ATM?

CAN I BUY A BITCOIN ATM IN HYDERABAD, INDIA AND PLACE IT IN CENTRAL OR PRASADS?

An excellent article on legality of Bitcoins in India : http://cis-india.org/internet-governance/bitcoin-legal-regulation-india?janrain_nonce=2014-05-08T08:33:12ZejYK7A&openid.ns=http%3A%2F%2Fspecs.openid.net%2Fauth%2F2.0&openid.mode=id_res&openid.op_endpoint=https%3A%2F%2Fwww.google.com%2Faccounts%2Fo8%2Fud&openid.response_nonce=2014-05-08T08%3A38%3A13ZWJFyRNAba4lb0Q&openid.return_to=http%3A%2F%2Fcis-india.org%2Finternet-governance%2Fbitcoin-legal-regulation-india%3Fjanrain_nonce%3D2014-05-08T08%3A33%3A12ZejYK7A&openid.assoc_handle=1.AMlYA9XLXJvbE-ohFxY-Gpj0VH6xKv_7dlhExmjRkokjHSIQ6yvV906B_LL48A&openid.signed=op_endpoint%2Cclaimed_id%2Cidentity%2Creturn_to%2Cresponse_nonce%2Cassoc_handle&openid.sig=gYR%2FOjalez0UQ3KD2Bn%2FMnBgvbM%3D&openid.identity=https%3A%2F%2Fwww.google.com%2Faccounts%2Fo8%2Fid%3Fid%3DAItOawn86KSdK2eYvL5PKYDSfBGLvYSOPB5S9Vw&openid.claimed_id=https%3A%2F%2Fwww.google.com%2Faccounts%2Fo8%2Fid%3Fid%3DAItOawn86KSdK2eYvL5PKYDSfBGLvYSOPB5S9Vw

Presently, the government of India has left us nowhere to identify the legal status of Bitcoins to promote acceptance of the technology. So people please (especially merchants) help understanding the benefits of the tech and raise voice  : https://secure.avaaz.org/en/petition/Reserve_Bank_of_India_Legalize_the_use_of_Bitcoin_as_a_mode_of_payment_or_currency_platform/