Bitcoin operators and exchanges in India have suspended operations temporarily after Reserve Bank of India (RBI) issued a circular on Christmas eve cautioning users of the risks involved with virtual currencies like Bitcoin.
One of the largest Bitcoin trading platforms in India, buysellbitco.in, has suspended operations indefinitely. The notice on its website reads “Post the RBI circular, we are suspending buy and sell operations until we can outline a clearer framework with which to work. This is being done to protect the interest of our customers and in no way is a reflection of Bitcoin’s true potential or price.”
The RBI circular and the suspension of operations on buysellbitco.in has triggered a chain reaction that has led other exchanges and operators to suspend their operations as well. Another such trading platform INRBTC.com has also suspended operations indefinitely.
“RBI stated that users of VC (Virtual Currencies) are exposed to both legal and financial risks. Further it states that absence of information of counterparties could subject the users to unintentional breaches of Anti-Money laundering and combating the financing of terrorism (AML/CFT) laws. The only option left now is suspend the services until further arrangements can be made.” reads the statement on the site.
Other exchange Unicoin.com which was announced just days before the RBI circular and was touted as the next best platform with Bitcoin trading has also suspended its operations. “Unocoin has decided to temporarily pause its buy and sell operations. All the pending orders today gets fulfilled and no more orders will be accepted till further notice. This is done to protect our valuable customers from getting into unintended legal risks”, read a statement on Unocoin’s website.
RBI’s intervention was inevitable considering the increasing popularity of the cryptocurrency in India. China has already banned use of Bitcoin by third party payment providers and financial institutions.