Bitcoin dreams fade for Indians amidst govt crackdown

20 Jan 2018

1

India's top banks, including State Bank of India, Axis Bank, ICICI Bank, HDFC Bank and Yes Bank, have suspend some accounts of major Bitcoin exchanges in the country suspecting dubious transactions, after the Income Tax Department on Friday sent tax notices to thousands of people dealing with the virtual currency.

The I-T notices follow a nationwide survey, which revealed that more than transactions worth more than $3.5 billion were made in just 17 months, according to a Reuters report.

The exchanges, which are facing the action are the top ten such platforms in the country and include Zebpay, Unocoin, CoinSecure and BtcxIndia, among others

Banks have reportedly asked for additional collateral equivalent to the loans these exchanges have taken, based on the market value of Bitcoin. They have also capped cash withdrawals for the few accounts which are operational, according to The Economic Times.

Investors in Bitcoin and other virtual currencies include tech-savvy youngsters, real estate players and jewellers and a majority of them are from cities like Mumbai, Delhi, Bengaluru and Pune, Reuters quoted income tax officials as saying.

Reports say eight of these accounts have likely been suspended after the banks found that the funds were utilised for purposes other than stated by the account holders.

"Reserve Bank of India has not issued any directive to us - it's a cautionary move on our part. We are wary about the purpose for which some of these current accounts are being used," ET quoted a banker involved in the matter as saying.

These ten exchanges reportedly have a combined revenue of over Rs40,000 crore and they operate at margins greater than 20 per cent, according to the the ET report.

The government is reported to be looking at imposing restrictions on virtual currencies and the finance ministry has set up a committee to look into the possibility of bringing in legislation to regulate the currency.

India's move follows similar crackdowns in countries like Japan and China and the South Korean move to shut down virtual currency exchanges.

Business History Videos

History of hovercraft Part 3...

Today I shall talk a bit more about the military plans for ...

By Kiron Kasbekar | Presenter: Kiron Kasbekar

History of hovercraft Part 2...

In this episode of our history of hovercraft, we shall exam...

By Kiron Kasbekar | Presenter: Kiron Kasbekar

History of Hovercraft Part 1...

If you’ve been a James Bond movie fan, you may recall seein...

By Kiron Kasbekar | Presenter: Kiron Kasbekar

History of Trams in India | ...

The video I am presenting to you is based on a script writt...

By Aniket Gupta | Presenter: Sheetal Gaikwad

view more