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Keeping Cool Under Immense Uncertainty and Draconian Laws Will Help to Weather Any Storm

October 26, 2018 16:36
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The past few days in this week has been emotionally exhausting for not just me, but people in the cryptocurrency community. With the arrests of the founders of Unocoin and the uncertainty surrounding regulations on cryptocurrencies, it has not exactly been an easy couple of days for us.

First things first, to understand what the case was about we had reached out to other cryptocurrency players in our story that was published yesterday. Abhimanyu Kashyap Head of Community Growth at Alluma had said, “Even if you are not a banking entity or an NBFC, you need special permissions to run ATM or CDM services in India. There are laws to regulate that fall under the Payment and settlement system act, 2007.”

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On being asked if the functionality made a difference Kashyap said, “The working doesn’t make a difference, here it is implied that the intent was to setup a cash machine for deposits and withdrawals to/from a bank account of a private company in India, so it still amounts to violation of the act and amounting to illegal conduct which might have been the basis of arrest.”

Interestingly, RBI says when it comes to installing ATMs, rules are not cast in stone. According to a report in portal banknet.com, a notification by the central bank said, “Reserve Bank of India has now permitted Scheduled Commercial Banks to install Off-site ATMs at centres/places identified by them, without having the need to take permission from the Reserve Bank in each case. This would, however, be subject to any direction which the Reserve Bank may issue, including for closure/shifting of any such Off-site ATMs, wherever so considered necessary by the Reserve Bank.” Why can’t there be an option for cash deposit machines like the one set up by Unocoin especially since stance on cryptocurrencies is so vague?

Unocoin’s official statement to us said, “The matter is hitherto sub-judice and hence, it is best if we refrain from commenting further. There has been some misunderstanding, as crypto-currencies are not the legal tender but it is still not illegal to transact in the same. We have always persevered to spread the right information and educate our users on the risks involved. Our faith in the legal proceedings still stands and we are willing to cooperate with the authorities.”

This was the same line told to us by Swaroop Anand, the advocate who is defending Vishwanath and Harish.

Adding to the confusion, on Thursday, NASSCOM announced that “cryptocurrencies are illegal”. Following the outcry, they retracted the statement and said they were only citing RBI’s stance on the matter given that “RBI has banned crypto-to-rupee trade”, which is also wrong. Nowhere has RBI banned crypto-to-rupee trade. It has merely stopped banks from functioning in tandem with cryptocurrency exchanges in India. Besides that, how can we omit to mention FUD-inducing headlines such as “Indian Cryptocurrency Industry is Crumbling as Regulatory Confusion Continues” which was given by CoinGape?

In times of adversity, it is crucial that we don’t lose our heads and start running around like headless chickens. But, unfortunately it seems like certain sections of the Indian media and mature companies are determined to fan an atmosphere of uncertainty and fear, which quite frankly is really sad. All we can hope is that this storm blows over quickly.

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