Bitcoins is a decentralised and cryptographic virtual currency whose legality is still unclear in many jurisdictions. Most of the jurisdictions have adopted a “wait and watch policy” regarding Bitcoins.
The United States tried to curb the use of Bitcoins with existing laws but the same has not become a complete success so far. China has though not officially recognised Bitcoins but it has also not made their use illegal as well. India is still analysing the use of Bitcoins and may come up with its verdict in this regard very soon.
Meanwhile, trading of Bitcoins suspended in Thailand due to Bank of Thailand advisement (PDF). According to this document/statement, Bitcoin gave a presentation about the workings of Bitcoin, the benefits of Bitcoin, insight into the company’s operations and future implications of Bitcoin to the Bank of Thailand.
At the conclusion of the meeting senior members of the Foreign Exchange Administration and Policy Department advised that due to lack of existing applicable laws, capital controls and the fact that Bitcoin straddles multiple financial facets the following Bitcoin activities are illegal in Thailand:
(a) Buying Bitcoins
(b) Selling Bitcoins
(c) Buying any goods or services in exchange for Bitcoins
(d) Selling any goods or services for Bitcoins
(e) Sending Bitcoins to anyone located outside of Thailand
(f) Receiving Bitcoins from anyone located outside of Thailand
Based on such a broad and encompassing advisement, Bitcoin Co. Ltd. therefore has no choice but to suspend operations until such as time that the laws in Thailand are updated to account for the existence of Bitcoin. The Bank of Thailand has said they will further consider the issue, but did not give any specific timeline. Bitcoin Co. Ltd. has currency exchange applications currently pending review with the Bank of Thailand.
The question that can be asked is whether use and dealing in Bitcoins legal or illegal in India? At present dealing in Bitcoins in India is a risky affair as the legality of Bitcoin in India in doubts. For instance, the Information Technology Act, 2000 (IT Act 2000) is the cyber law of India that governs the online acts or missions in the Indian cyberspace.
The IT Act 2000 prescribes cyber law due diligence in India and the Internet intermediary liability in India. These cyber laws due diligence and Internet Intermediary requirements squarely apply to use of Bitcoins in India. However, none of the Bitcoins enthusiastics are following the applicable laws of India as on date. Thus, they are violating the laws of India and can be prosecuted both civilly and criminally.