Topic: IRS visit to CoinMonk Ventures office in Tumkur (Read 5036 times)

Yea but problem is even other btc owners shouldnt say anything until they hire a lawyer. Things like AML, FEMA, KYC are deep rooted laws and not simple - "I have PAN Card copies so I am safe in KYC and AML" or "Banks are responsible for checking if its customers are sticking to FEMA laws" .

Now this has been a pet peeve of mine for sometime on this forum. This has point has been made over and over again - how RBI's circular dint make a dent in the btc price. Oh, the smallness of RBI or some story like above. Does anyone actually trade in real world? If you did, you would know RBI/India makes an impact only on India denominated pairs (ie USD/INR, EUR/INR). Nobody in EUR/USD or GBP/USD gives a shit what RBI thinks. Is there an official exchange with an INR denominated btc pair? BTC/INR? No right? If it did you would have seen a change.
And frankly we did see a change, dint we? INRBTC, BUYSELL etc are gone for good and look at the prices on LOCALBTC...its a shade of its former pricing structure now. The price of BTC/INR did fall. So get over it.
As for, China. Its the second largest market after US, regulations by it will cause changes in the BTC/USD space. Why? Because of USD's position as reserve currency.
Frankly, today Japan has more power than even US as far as btc is concerned. Why? If they ban mtgox for sometime it will cause a colossal impact on the price. Though it wont happen any time soon.

Well said. 8% is ridiculous! Throwing out such numbers will open doors for strict regulation or checks. At the same time I assume the govt. officials may have talked to other bitcoin exchange owners, who will probably be very honest in their answers.

This will leave them confused, nonetheless.

This ^ And did they send a legal letter summoning? or was it just an obligation?

Now I am going to be flamed for this but this thread is an epitome of why people involved in BTC in India are effed. 70% don't understand the law, are willing to take unnecessary risks because they feel obligated (or intimidated or even too smart) to give opinions which might later form legal basis of what IRS/ED laws would be formed upon. For god's sake, if you are in legal trouble hire a damn lawyer. Explain him your position and let him deal with ED/IRS.

Offtopic:
Here's an hypothetical idea: Get Aam Aadmi Party to accept bitcoin donations. (Theres enough tech savvy guys on their team to understand the concept and pitch:The wikileaks eg might help)
Let see how that plays out.

How can you just come up with random numbers related to Bitcoins?

It's highly unlikely (actually almost impossible) that India has 8% of Bitcoins. Even countries with high end miners easily accessible and with high percentage of early adopters may not have such high percentage of Bitcoins. The Indian forum hardly has any activity. 4000+ crores is a lot of money. Even a few million dollars can cause wild swings in Bitcoin prices but announcements in India have no effect on Bitcoin because there are hardly any coins here in India.

India may have 15% of world population but only 1% of that has broadband access. Compared to world broadband access, India may have about 3% share. Also consider that broadband users from other countries have much higher income. If they come up with a list of users and approximate Bitcoins with them, they will wonder where the rest of the Bitcoins have gone! Better not to get authorities to react based on speculation.

Indian govt cant make any laws on regulation of bitcoin, coz no other country made anything so far & even if India makes, it will give more problem to govt.
If they give license to private individuals then they also has to give license to banks & other businesses who deal with exchanges.
Banks will never allow govt to give license to Bitcoin.
So, in my view, Indian govt is just going to sit & watch it.
They will do many surprise raids, in the name of AML, hawala, anti terrorism....,if any one set up business in India for Bitcoin exchanging.

http://www.thehindu.com/business/Economy/taxmen-train-eyes-on-bitcoin-community/article5530782.ece

Yes the office is in India. Legal dept is little confused as well mostly by looking at other buy/sell operations which are also shut down and the ride on buysellbitco.in
I am still looking forward for their opinion of what can be done next. I am visiting the best law cum auditing firm in India tomorrow to seek their opinion as well.

Hello,
No the filing is not done in bitcoins. it is still done in INR equivalents where ever needed.

Are all of your offices in India?  What does the legal department say in response to this?  Assuming CoinMonk and you other venture have some legal consultants...

I like to know how Chartered Accountants account bitcoins ?

Most of the Chartered Accountants i visited were not willing to help because of RBI warning and say its not legal to file accounts in bitcoins as law permits to file accounts only in INR

Regulations in India alone will not help volatility. This is a Global phenomenon. And I can assure you that there are way too many countries out there that 'will not' regulate Bitcoin in any way.
In fact, one of the biggest problems to solve in Crypto is localization.

The path that you are taking is not being criticized, only what is being discussed by you'll has been from a very personal view rather than a global one.

To me, regulations and volatility is more of the chicken and egg issue. if regulation comes, there will be more adaptation and more the adaptation less the volatility. for volatility to decrease, we need wider adaptation and it occurs when business start accepting bitcoins and people buy bitcoins for transactions and for this to happen we need proper regulations. One way to tackle this is to slowly grow the bitcoin network in india while falling into the eyes of regulators and then giving them time to form regulations. now we have already fallen into eyes of regulators and now they have given out unclear statements making bitcoin network to become stagnant. according to me, the next valid move should be from regulators end and instead if it happens from businesses then the uncertainty continues as it used to be but at much greater level.

China felt a price bashing because of the exchange infrastructure. Apart from inrbtc, no one else was doing an order match or price setting, hence India did not feel anything. If anyone was tracking prices on inrbtc, you would have noticed that it did some crazy fluctuations. It had nothing to do with adopters and adoption time. As far as I know, Bitcoin is still early adoption technology as not too many people have caught on as yet. There is simply too much opportunity left.


Is this a problem with the Indian government or price volatility? I know 100's of merchants in India who want to integrate with Bitcoin, but fear it's volatility. The regulation does play a part here, but not as bad as volatility. Fix the volatility problem and the regulations will fall into place.


You missed the category of people who do not wish to exchange.


Some places to look at are software rules for money changers. There are some things in place. Another thing to look at for appropriate licences is the Payment & Settlements Act of 2007.


I do hope that some of that shed some light on the complete set of events from the world perspective rather than the traders. It is my wish for every business in India to do awesome, so wishing you some luck .

Speculation is bad for Bitcoin. Please do some home work and avoid speculating. There is enough public domain data in order to get a rough estimate. And that is nothing close to a million.
I understand that you'll just want to make money, but using fake testimonials and speculative numbers ideaologies to drive a phenomenon will only hurt the adoption process once authorities find out that these numbers were fabricated.
But glad that things have cleared up for coinmonk and unocoin.
Please avoid vague numbers and assumptions, they are more harmful than anything else.

You missed a category of people who wish to use Crypto without exchanging at all. Ever. Tough, but possible

Very Important suggestion. These Q/A should be pinned at the top of the forum.


I really Love this part...

I hope they are sponsoring this trip!  

Also, I hope the media understands the power of bitcoins!

Again i just cannot believe that the total bitcoins in india is like 1% or so. In the early days of bitcoin, people did not really need specialized equipments to mine bitcoins - just their computers were enough and this is where we see early adopters who have many thousands of bitcoins and this apply to every country. when govt released a press note and when the buy/sell services did pause their operations obviously these early adopters are not trying to sell bitcoins on daily basis as they do not really need to - they are not trying to speculate and hence there was no price drop. When china released the statement, there was a huge fluctuation because in china - apart from early adopters like any other country, there were also way too many late adopters who had invested in bitcoins and were partially responsible for btc to go from 200 to 1200 in two months time.

At this present situation in India, the new businesses are not so much ready to accept bitcoin, investors are not ready to invest in bitcoin and the consumers are not ready to buy bitcoins for transactions. i should say in india - bitcoins have pretty much become stagnant. Till govt reacts to give more info about what they want to do, the situation continues to be stagnant and if this takes lots of time (we already know govt usually takes lot of time to react for every stimulus), then india would lose the opportunity and will stay behind in the race. so this is the exact reasons we need to make sure we hear more info from authorities as soon as possible (atleast in next few months time which itself is asap). On the other hand as bitcoin related activity continue to be stagnant, the authorities would obviously see no reason to react as there is no need to which is even more bad.

I can ofcourse see the early adopters disagreeing with me as they would have mined or earned a lot of btc while btc was very cheap or have purchased btc at very cheap rates, and they may have a few thousands of bitcoins that are sitting in their wallets and are willing to offer as much time needed for authorities to issue their statements as it kind of does not matter how long such statement takes to come out as it is not really necessary for them to sell bitcoins on daily basis and they would also have plan B of encashing bitcoins slowly in their life time at foreign exchange and getting the money to india just in case bitcoins gets termed as illegal in India. If you do not belong to this category and are depending on offering some products or services to make some bitcoins while equally loving bitcoin and india, you would not like the present situation of bitcoin being stagnant and you expect some actions at regulatory level as soon as possible so that you can move ahead with your projects and I belong to this category

From I T dept, Unocoin is not violating any rule and they are happy as long as they get income tax for profits earned at Unocoin. I T dept obviously cannot talk on behalf of other departments and they just advised me to take legal opinion before starting the its operation again. I am already in this process.

Another info i got to know is that it is ED that have advised IRS to investigate CoinMonk and Unocoin. Today I met the Nethrapal and a couple of his senior officers and had to explain how bitcoin works and how much it is trackable and how the exchanges can help them track bitcoin - so it again became a technical discussion than investigation on CoinMonk or Unocoin. Presently they have asked me to submit a paper describing how bitcoin works, how transaction works, how to mine bitcoins and what happens technically in bitcoin mining, to what extent bitcoins are traceable and what role an authorized exchange can play, how bitcoin can be misused and if it can be mitigated in some way, what is the view of bitcoin from various other countries, and my openion on how bitcoin can be taxed for speculators and miners. i will be working on this once i am back from mumbai - i m visiting mumbai for two days from tomorrow for a press meet along with nishith desai associates to talk about the present situation of bitcoin in india and asking authorities to react to the present situation asap through media.

@dashingriddler So when the UnoCoin operations are supposed to begin ? Other operators at least got some business, whereas U had to suspend operation within days of launch... i guess. If IRS okays everything, will u start operating soon ?

Maybe we should make a Q/A form Benson with what info (answers) should be given to authorities based on the questions they asked from Mahin and coin monk. Could come handy to BIG coin holders and miners here in India, in case of a random raid.

@Coin Monk: I can bet you, Indian government will never give a statement like "Bitcoin can be freely accepted by merchants in India" etc. positive things like that, you get the point. Bitcoin is designed in a way that if it gets mainstream, it will take power away from the central banks, it is much more bigger than just another money transfer method, currency or get rich quick thing. (It can even topple governments and lead to revolution)

There are two exceptions though:

1) If US passes a very positive statement about it, then India will follow their footsteps since Indian government is puppet and is driven by cash from capitalists...and it's impossible for these 70-80 yr old asses (yes asses) leading our country to understand such complicated stuff and make a judgement on their own.

2) India gets leaded by some party which believes in decentralization (obviously other than those BJP, Congress MFs) maybe AAP, dunno.

1 million bitcoins with Indians sounds way off the mark. That translates to a market value of USD700mn to USD 750mn (Rs 4,200 to Rs. 4,500 crores). Highly unlikely.

Putting out such a high number there will probably interest the IT guys even more from a money laundering angle!

For the love of god, get a lawyer that understands bitcoin and stop throwing random numbers out to the government.

Also, I'm curious - did they have a court issued warrant to obtain your customer data or did they intimidate you into giving it to them ?

When will you businesses learn that making  such claims dont  help. dont over exaggerate the numbers.

P.s - just because there  is  a high number of  downloads in india  does not mean that people  are  using bitcoins.



 

Please do not push people into knee jerk reactions. The government officials need to understand the entire gamut of what they are dealing with. If they are pushed to a corner with false numbers and claims, this will only get a bad decision at the end of it all.
We really do not need an urgent reaction. Would be better to think of the entire community and widespread usage of Bitcoin rather than few businesses that have stalled for no reason.

I seriously doubt India has more than 50000 bitcoins. Please make sure you emphasize this is your view only and others have very different figures in mind.

Those numbers seem way too high. Considering that only 411 people bought from buysellbitco.in, the number of people seen on this forum, the fact that mining became out of reach of most people here before awareness, and that it was very tough to buy after that due to lack of exchanges, it seems way too farfetched. RBI's statement had no effect on bitcoin prices. i.e very few were trading on exchanges abroad.

Hello,
ofcourse that information is not known is my first answer. but they really needed an approx number and i ended up saying about 8% and i did tell them that it can never be verified to be true.

Your intentions seem good but please don't make up the numbers like that or alternatively you could just say "that would be difficult to asses" and be honest (not in anyway implying you are dishonest, just that throwing numbers like this w/o any basis is useless) about it.

Edit : lol I meant it to be "assess" not "asses" .. but ill just let it be 

1% is 120000 btc. i m way too sure we have more than that in India.
Regarding the numbers to govt officials, the more adopters and the higher btc they hear - they feel it is more urgent to react instead of just giving uncertain statements or just saying they are waiting and watching. We should be ready to hear the answer from them sooner than later. It is not so great they wait for ever and bring some kind of retrospective law and prosecute every one who have done anything with bitcoin. On the other hand if they continue delaying to say what exactly they want to do with bitcoin, the wide spread adoptation just cannot happen - miners are afraid to mine bitcoins, business are afraid to accept bitcoins and consumers are afraid to purchase bitcoins. If govt always kept quite, it would have been a different issue. Now India is just left with an unclear statement regarding the usage of bitcoins and the buying/selling service had to pause their operations because they dont know what to do. If they do not want to regulate it for ever, let them say that or if they want to say bitcoin operations will be considered as illegal in india or allowed in India let them say that. We cannot operate any profitable bitcoin business in india at the present situation till we have more clearer explanation from them.

Woaah ! wtf was that ?

Okay, assumed for a second even if it is (impossible although)...why would you want to disclose such big numbers to authorities, remember government is not a friend of crypto. They will try whatever they can to crush it, every country's government.

I bet you that Sunny's or techguy's assesment of 0.5% - 1 % is more accurate. And those were random numbers thrown!
Calculate this based on nodes, claims, mining equipment purchases and tracking.. etc.. Not flimsy %ages

+1

I doubt that 8% figure. When compared to global community, I think India community is much behind the race. Following are some of the statistics based on number of miners, legality, awareness...etc. So based on these figures India bitcoin would stand in the range of 0.01% to 0.1% ?  (Note : I have not done much study on this computation. This is just a rough guess based on the following links. )

http://bitcoin.stackexchange.com/questions/1706/any-statistics-on-usage-of-bitcoins-by-region-or-country
http://bitcoinstatus.rowit.co.uk/
http://www.google.com/trends/explore#q=bitcoin&date=today+1-m
https://blockchain.info/nodes-globe?series=topBlockRelay
https://blockchain.info/charts

That is my analysis based on the population of india which is about 15% of world's population and India being backward in bitcoin for now. Obviously not every one who has bitcoin will declare that they have XX bitcoins in public. I still believe we have near to a million btc with in India. Just that not many people are buying and selling them as there is no proper bitcoin exchange (and no proper way to convert lot of btc to INR in an accountable way) and they are just preserving them for now and this made the bitcoin prices not to drop when rbi statement came out and exchanges did pause operation. We all know that the exact number cannot be reached no matter what and this itself was one of the concern of that IRS officer.

I wish new year brings good prospect to you & all bitcoiners of India.

I do hope that nothing adverse occurs due to this careless assessment of Bitcoin in india.

Really 

All the Best !!

hope evrything works out in a good way for you and all the bitcoiners in india.

All the Best.

Looks like everything went just fine!

Fantastic news.

Please keep updating this thread.

Hello,
Today I had about 15 guys from IRS visiting the office. Out of that two guys had attended bitcoin conference on dec 15th. They had emailed me to get the free passes but had failed to identify themselves that they are from I T department.
As soon as they came, they searched entire office for any records they may find and also took interview from employees and have searched their computers. They also asked me lot of questions about the business we are doing and income we are earning and the income tax that is being paid.
As they relaized CoinMonk is a very newly registered company and the company objectives includes "crytography related product sales and services" they were happy that we have formed the company properly to do the business. They also did ask about KYC documents we have for Unocoin.com and they looked into it.
Then the dicussion totally deviated to the topic about what is bitcoin and how it works, how IT department can put income tax on miners, how they can track cash sales of bitcoins, how many bitcoiners are there in India and how many bitcoins they have etc for which i have given as much and as accurate info as possible to my knowledge. For them to ask miners to pay income tax based on the present value of the bitcoin, i have asked them to authorize bitcoin exchanges so that miners can convert bitcoin to INR and pay the INR to IT or else have IT dept accept income tax in bitcoins itself. Regarding the numbers, i have said about 8% of bitcoin economy may be in india which is about 1 million btc. And we may have about 30,000 people with bitcoin wallets with some bitcoins on it based on my experience and understanding and info from other people in meetings. i also had to explain them how the bitcoin becomes tracable and how they can atleast regulate it at entry and exit points which happens at exchanges.
I had to type the answers for their questions and i had to sign for the printouts.
They took some of the bitcoin related documents i had along with KYC documents i have collected from various Unocoin.com customers in a DVD which they made sure it is readable in their laptop.
Now they have issued summons to me to come and meet in their office tomorrow in Bangalore.

All i can say regarding today discussion is, i was able to lead it in as positive way as possible and hope i can do the same tomorrow as well. i will update this thread tomorrow after the discussion with them. wish me luck