Oh man, here we go again. The amount of FUD in this article is absolutely shocking! The Reserve Bank of India has not declared bitcoin as illegal [1]. The article certainly does insinuate that it is:<p><i>A couple of days after the Reserve Bank of India issued an advisory to public not to indulge in buying-selling of Bitcoins, the first raid in India was undertaken in Ahmedabad by Enforcement Directorate (ED) on an entity that provide platform to trade in this illegal but virtual currency. </i><p>I'm 100% certain that the website in question however was in violation of several KYC and AML norms as well as money exchange regulations, so the fact that they shut it down does make sense.<p>It is sad more-so because the regulatory framework is extremely opaque and if I were to start a bitcoin business in India, I wouldn't know where to begin...<p>The RBI has done a shitty job so far of regulating the Indian Rupee. I'm an Indian and my personal savings are now worth 30% less since 2009 on a global level (USD->INR went from Rs. 43 to a dollar to Rs. 62 now..). Internal inflation is at 10% YOY and there's no practical way to protect your money. Of course, I'm not implying that bitcoin is the solution to all these issues, just saying that on a personal level I do have issues with the way the RBI has managed (mismanaged?) our currency.<p>[1] - <a href="http://www.rbi.org.in/scripts/BS_PressReleaseDisplay.aspx?prid=30247" rel="nofollow">http://www.rbi.org.in/scripts/BS_PressReleaseDisplay.aspx?pr...</a>
I see random people confidently asserting that btc isn't illegal in India. Don't listen to them. Talk to a tax lawyer.<p>If you're in India, the sensible thing to do is to stay away from bitcoin. This is based on my conversations with my brother who <i>is</i> a tax lawyer. According to him the legality of btc and the laws that govern its purchase/sale in India aren't clear at all and there is an expectation that the RBI will clarify the regulatory framework and the laws that they believe apply to btc. He also believes that RBI has historically favoured extremely conservative interpretations so they will likely shoot down btc. This is obviously not legal advice, not least because it's coming through a lossy channel (me).
That DNA article has half-baked information. Here are some saner links:<p><a href="http://www.thehindu.com/business/Industry/bitcoin-exchanges-shut-shop-in-india/article5504407.ece" rel="nofollow">http://www.thehindu.com/business/Industry/bitcoin-exchanges-...</a><p><a href="http://www.zdnet.com/in/bitcoin-exchanges-suspend-operations-in-india-amid-govt-warning-7000024648/" rel="nofollow">http://www.zdnet.com/in/bitcoin-exchanges-suspend-operations...</a><p><i>>>>The central bank had, on Tuesday, issued a notice, warning the public of the risks involved with virtual currencies while claiming that it could be used for money laundering and funding anti-terrorism activities. It stopped short, however, of issuing a ban or any other restrictions.</i><p>But still, I don't know what "framework" RBI wants to bring in, to "regulate" Bitcoins. From <a href="http://rbi.org.in/scripts/BS_PressReleaseDisplay.aspx?prid=30247" rel="nofollow">http://rbi.org.in/scripts/BS_PressReleaseDisplay.aspx?prid=3...</a><p><i>>>>The Reserve Bank 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.</i>
So, can anybody clearly tell/explain me this ?
1. Is holding BitCoin is legal/illegal in India ?
2. What about those who bought crypto from these raided exchanges ?
3. What if now I directly transfer BitCoin to a friend in USA as a gift. Is it legal after RBI Circular ?
4. What is Foreign Exchange Management Act, and is it a violation of FEMA if somebody buys BitCoins and stores it with them ?<p>Sorry for asking questions in comments, but I'm a worried as hell :(
I feel sorry for this guy.<p>I've bought bitcoins from him in the past and I think he was doing a good job, at least for ensuring that his services are not used for money laundering.<p>ID and address verification documents were needed and a copy of the PAN Card was also taken.<p>Since all payments are made via bank accounts, It won't be difficult for ED to list out the bitcoin traders even if they were not collecting this information. I wonder how the website's users would be impacted.
What about those in India who traded using localbitcoins.com? Is there any possibility that they too can get into legal trouble or affected in some other way?
So the question is, would Bitcoin or any other online currency, accept the removal of anonymity, in order to stay legal.<p>Legally, I do not know what law says, but logically, no country would accept such exchanges, unless they communicate the details of bitcoin exchanges, for tax purposes.<p>As for paypal, though first part of their failure was due to RBI restrictions, they could have made a solution around it. There problem is more related their UI/UX now, nothing else.<p>I would stand by RBI on this, regardless of what anyone thinks. Bitcoin, might be satisfactory enough for most tech savvy people, but for a average farmer, whose interest must be protected by RBI (as its duty), won't trust it.<p>the author uses the word "opaque" in that sense. Have you ever tried to explain, how bitcoin stores money to a average Indian?
To alleviate poverty, each state in India should have separate currency.
<a href="http://www.lietaer.com/2010/03/the-worgl-experiment/" rel="nofollow">http://www.lietaer.com/2010/03/the-worgl-experiment/</a>
They raided him even though everything was through banks and already recorded, and you had to provide ID. His problem is he didn't bribe the right people I guess and they decided to steal his money.