The Legality Of Bitcoins In India

The Legality Of Bitcoin In IndiaAs more and more people and institutions have started using Bitcoins, a need has been felt to regulate the unregulated use if Bitcoins in India. The legality of Bitcoins in India is still not clear but it is clear that dealing in Bitcoins in any manner is full of legal and regulatory risks.

Many countries like China, France, Thailand, Norway, etc have either regulated the use of Bitcoins or they have completely banned them in their jurisdictions. But the Reserve Bank of India (RBI) and Indian government are still sleeping over the issue. Meanwhile, Bitcoins frauds and crimes are increasing world over, including in India.

India has just adopted a time gaining tactics by saying that a public advisory to warn against potential risks of Bitcoins in India would be issued by Indian government very soon. When we need a full fledged regulation to regulate the dealings of Bitcoins n India the use of an advisory seems to be a naive idea.

Perhaps Indian government and RBI lacks the techno legal expertise to manage technological challenges like Bitcoins but sooner or later Bitcoins have to be regulated in India. Indian government and RBI have already spent too much time to analyse the situation and nay more time taking exercise is simply counter productive. Surprisingly, even the Securities and Exchange Board of India (SEBI) and Income Tax department have not taken any stand in this regard.

It is legally wrong to assume that dealings in Bitcoins in India if strictly legal as individuals and companies have to take care of the cyber law due diligence and Internet intermediary rules compliances. For instance, a platform selling and purchasing or trading in Bitcoins must not only comply with the provisions of Information technology Act, 2000 but also with laws applicable to online trading and income tax.

Presently, such e-commerce websites and platforms are not at all complying with the laws of India. This also means that besides the cyber law they are also violating the money laundering laws and income tax regulations of India.

In these circumstances, IT and cyber frauds in Indian companies have increased a lot. As the present corporate fraud investigations in India are not undertaken properly, the criminal dealings in Bitcoins in India are remaining untraced. However, this situation would change very soon when e-discovery methodology would be applied by Indian government and regulatory authorities.

It is in the own interest of Bitcoins stakeholders to comply with Indian laws to avoid civil and criminal prosecutions. Avoiding Indian laws compliance any more would bring serious legal ramifications.

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