Hard on the heels of the Reserve Bank of India issuing a warning to the public to avoid trading in unregulated virtual currencies like the Bitcoin, the first raid in India on an entity dealing in virtual currency was carried out in Ahmedabad by the Enforcement Directorate.
On Thursday, ED officials raided the premises of Mahim Gupta in Bopal area of Ahmedabad, who provides a trading platform through his website buysellbit.co.in, reports DNA. During the preliminary investigation, the ED found that it is in clear violation of the Foreign Exchange Management Act (FEMA) rules of the country as central bank does not permit such transactions.
''We have found that through the website 400 persons have recorded 1,000 transactions worth a few crores of rupees. We are gathering the data of the transactions and name of the people who have transacted in the virtual currency from Gupta's server that is hired in the US. 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,'' said a top ED official.
According to the report, a separate raid was also conducted in Satellite area of the city. However, the person the investigation agency was looking for could not be found. ''When we reached his office, he was not there. We have sealed the premises,'' the official added.
The value of transactions is not known as each transaction will be verified by the investigating agency. However, it is likely to be around Rs20-30 crore. ''Value of transaction is one aspect. Being a virtual currency its transfer and settlement is done online. No country has legalised Bitcoin as of now because of its opaque nature. The biggest threat is that without recording your transaction in official foreign currency platform money can be transferred like hawala with the use of this transaction. We are examining such instances, if any, here,'' the official said.