Indian Authorities Raid Bitcoin Exchange

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The Reserve Bank of India issued a strong warning on Tuesday against trading in Bitcoin and similar virtual currencies, saying that these currencies did not carry approval of the Central Bank and that the traders of virtual currencies on these platforms were “exposed to legal as well as financial risks.”

And on Thursday the officials from the India’s Enforcement Directorate raided the office premises of buysellbit.co.in, a leading Bitcoin exchange operating out of Ahmedabad.

An official of the Indian Government told media that “We have found that through the website 400 persons have recorded 1,000 transactions. At present, we believe that this is a violation of foreign exchange regulations of the country. If we are able to establish money laundering aspect then he can be arrested.”

After this raid the Buysellbi.co.in has stopped its operations and following message is posted on its main page:

“Post the RBI [Reserve Bank of India] circular, we are suspending buy and sell operations until we can outline a clearer framework with which to work.”

After the raid, other currency exchanges like Inrbtc have also suspended their operations and similar warnings have been placed on their websites. The move from the Indian authorities is somewhat similar to the statements from the authorities from Norway and China who also cautioned against the dangers of these virtual currencies. But the move by Indian authorities goes one step further with police raids.

However, the raid has not jolted the world confidence in Bitcoin. At this time the Bitcoin is trading on average rate of one Bitcoin to $800.

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