In the wake of the arrest of the co-founder of Indian cryptocurrency exchange Unocoin over allegations of illegally operating a Bitcoin ATM, exchange CEO Sathvik Vishwanath provided a detailed account of his detainment.
In a recent interview with Quartz media, Vishwanath gave an account of how the series of events transpired in the last week following the arrest of his co-founder Harish BV on October 23. According to Harish, the Bitcoin ATM’s operational tests and upgrades were at its final stage when he was apprehended by Indian police at the Kemp Fort Mall in the southern city of Bengaluru. At the time, Harish was ensuring that the machine’s systems would be fully operational in preparation for its launch.
Billed as India’s first-ever Bitcoin ATM, the machine was meant to serve as a fiat gateway for domestic investors seeking to trade digital currencies, enabling users to deposit funds to be used for trading on the Unocoin exchange, on top of allowing them to withdraw funds from their account.
During testing, police entered the mall and escorted Harish for interrogation, after which he was taken into custody, accusing the co-founder of violating existing Indian law as the installed ATM lacked a number of approval requirements. Following Harish’s arrest, Vishwanath has also been apprehended the day after.
As Vishwanath commented in the interview:
“I knew this was coming after Harish was charged. I was at home that morning, trying to figure out what needs to be done to get Harish out of police custody, when the officials came to my house. They took me for questioning and later I was also charged and sent to judicial custody.”
According to Vishwanath, his arrest was likely a part of the Indian government’s move to curb attempts at circumventing the government’s prevailing “cryptocurrency ban” where investors bypass banking relations by removing intermediaries from funds withdrawals and deposits.
As Harish further noted, the police had accused the exchange of defrauding customers, purporting that he tried “to cheat customers” by guaranteeing a two-fold return, a claim that he vehemently denied, as the exchange had not once received such complaints from its customers.
Responding to the arrest, the police’s cybercrime department also stated that the state government has not authorized the exchange to operate the ATM, and is therefore “outside the remit of the law.”
Unocoin’s legal representative Swaroop Anand countered the accusations, stating that the government’s move was unjustified, as the mall in which the machine was supposed to be located would have already secured the authorization prior to its installation.
As Anand underscored:
“It is a kiosk that is being set inside the mall and the mall would have had already taken trade permissions. Therefore, there was no need for Unocoin to take any other permission and there had not been any violation of licence requirements.”