Indian Bitcoin exchange closes amid regulatory warnings and tax inspections
India's largest Bitcoin trading platform, BuySellBitCo.in, closed on Dec. 26 as a result of regulatory warnings from the Reserve Bank of India, according to The Hindu.
On Dec. 24, the Reserve Bank of India warned Indian consumers of the risks involved with virtual currencies, while claiming that they could be used for money-laundering and funding anti-terrorism activities. The Central Bank did not issue a ban or any other restrictions on virtual currencies, The Hindu reported.
The closure of BuySellBitCo.in, which had monthly Bitcoin transactions of 12 million Rupees ($193,000) was followed by the closure of other trading platforms including INBRTC and a sell-off by Bitcoin users, The Hindu said. A statement on BuySellBitCo.in's website said that it was suspending operations until a clearer operating framework could be found.
On Jan. 1, representatives of the Indian Income Tax Department visited Tumkur-based Coin Monk Ventures, a Bitcoin mining start-up that creates the digital currency, The Hindu said.
"Much of the discussion that took place was over how Bitcoin actually works and how income tax can be levied on miners and exchanges," Satvik V, Coin Monk's founder, told The Hindu. "The Income Tax Department is interested in collecting a database on how many digital currency users there are in India and whether they can be identified and tracked."
The Indian virtual currency community is responding to regulatory action by the Indian government with the creation of the Bitcoin Alliance India, modeled after the Bitcoin Alliance of Canada, The Hindu reported.
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