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Nationwide raids on 9 Bitcoin exchanges

15 December 2017
Nationwide raids on 9 Bitcoin exchanges

The Indian Income Tax Department has raided bitcoin exchanges across the country seeking to identify crytocurrency traders.

The RBI had previously said those trading in virtual currencies were doing so at their own risk, given that the central bank had not given a licence or authorisation for any company to deal in such cryptocurrencies.

Be careful, as the Income Tax (I-T) Department on Wednesday conducted survey operations at major Bitcoin exchanges across the country.

Sources told DNA, "We are collecting the name of investors and their transaction details".

As a part of the survey conducted under Section 13A of the Income Tax Act, the IT department is gathering evidence of the identity of investors and traders, transaction undertaken by them, as well as identity of counterparties, related bank accounts used, among others. The survey teams have some special data about the working of these exchanges.

In a first-ever move to understand and unearth the extent of transactions/ investments in Bitcoin - the crypto currency - in India, the Directorate of Income Tax (Investigation), Karnataka & Goa on Wednesday piloted fact-finding searches at the nine exchanges of Bitcoin in the country, including two in Bengaluru. "However, the operations are still on and final findings will emerge later".

Earlier this year, the Reserve Bank of India (RBI) had made a call for caution on virtual currency, while stating that they pose potential financial, legal, customer protection, and security-related risks. She declined to say if the visits were to investigate tax evasion or money laundering.

Last week, the RBI said it was concerned about bitcoin, just days after the cryptocurrency hit a record high of just under $11,800, stocking fears that a rapidly swelling bubble could burst.

The regulators said they were also investigating cases from past year when large amounts of "black money" had been laundered using bitcoin during the demonetization process in the country. More recently, the Supreme Court of India sought the government's response on a plea to regulate the flow of bitcoin and establishing a panel to develop a digital currency regulatory framework.