On the afternoon of October 23, 2018, employees of Unocoin Technologies were rejoicing. The Bangalore-based cryptocurrency startup was all set to launch a kiosk, touted as India’s first cryptocurrency ATM that would allow its customers to deposit or withdraw digital currencies linked to their Unocoin account. This was akin to using a bank account and transacting in multiple currencies, say Rupee, Dollar, Euro, Dirham; just that, cryptocurrencies would have a virtual value and would be transacted online through a unique set of keys or passwords.
The Unocoin team, along with its co-founder Harish BV, was testing the machine that was to be unveiled at Kemp Fort Mall in the city, when things turned awry as police landed at the site, interrupted the operation and seized the machine. They also took Harish into custody for questioning and later charged him under the IT Act for opening an ATM without requisite approval. Harish and Unocoin were accused of having violated banking norms.
The police action sent shock waves among the startup and tech communities, particularly those in the cryptocurrency industry. Even as the company was digesting the news and trying to find ways to bail out Harish, the police picked up another co-founder Sathvik Vishwanath.
Unocoin, on its part, argued that as the ATM wasn’t connected to any banking network or banks, it was not like other ATMs, and didn’t violate any norms. It said that it was a private kiosk and there wasn’t any need for procuring any license or approval.
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