• Home
• /
• World

Two bitcoin traders raided in Gujarat

The websites run by software professionals Mahendra Gupta and Nilam Doctor provided platform to trade in bitcoins against which the Reserve Bank of India (RBI) had recently issued an advisory to public not to indulge in its buying and selling.

Sources said that operations by websites buysellbit.co.in. and rbitco.in were in clear violation of Foreign Exchange Management Act (FEMA) rules of the country as the apex bank does not provide permission to indulge in such transactions.

Through Gupta’s website, 411 people had recorded 1,000 transactions that amounted to millions of rupees. He had developed software for a bitcoin trading platform for an Australian company and accepted payments in bitcoins. He later developed a replica of the same platform and began trading in India.

During the 36-hour raid, 13 bitcoins worth Rs600,000 were recovered from Gupta’s possession.

Investigators of the ED have taken help of ECS Corporation that specializes in forensic audit and IT technology to establish money laundering before arresting Gupta whose server is hired in the United States.

The owner of the other bitcoin website’s office that was raided, rbitco.in, was declared absconding by ED officials. He is believed to be in Mauritius. Doctor is an alumni of Ahmedabad’s LD Engineering College (1983 batch) and the B.K. School of Management (1985).

He operates two companies in Mauritius and US which too trade in bitcoins.

Hyderabad-based unocoin.com and Bangalore based inrbtc.com bitcoin trading websites are also under scanner. All the four website owners had held a national conference on bitcoins in Bangalore on December 14 and 15 to popularise the concept of bitcoins.

It is believed that there are only five entities that provide trading in the virtual currency in India, including two operating in Ahmedabad which were raided by ED earlier this week.

Bitcoin, which came into existence some three years ago, is a virtual currency that can be generated through complex computer software systems with solutions shared on a network.

Despite new in existence, bitcoin has already become the world’s most expensive currency and its per unit value per unit soared past $1,000 level or about Rs63,000 recently, although the prices have now slipped to Rs46,600 after China banned it.

The RBI had issued a strong warning on Tuesday against trading in bitcoin and other similar virtual currencies, saying that these currencies did not carry its approval and that the traders of virtual currencies on these platforms were “exposed to legal as well as financial risks”.

mahesh@khaleejtimes.com