The biggest concern they have is transactions which happen within Indian users. They will get absolutely no information about it. Although when finally someone realizes the money, it has to come to the bank, but taxes like Sales Tax/Service Tax (think chain of transactions), which are based on the transactions cannot be enforced.
But isn't that the same as selling something through OLX ?
I suppose the issue with buysellbitco.in was that it was missing some paperwork that it should have had because they were accepting people's money (INR) and selling bitcoins on a commercial scale.
I'm not sure why they said it violated foreign exchange acts though..
the statement issues by RBI earlier, said that anyone who would be found to be dealing in bitcoin, would be considered violating FEMA. As someone said above, money laundering is a big issue in India. On the financial side of things, it is very hard even for seasoned "hawala" operators to launder any money. Bitcoin is undoing that in Indian context, no matter how you see it.
And the fact the silkroad used bitcoin, doesn't help things either.
"The absence of information of counterparties in such peer-to-peer anonymous/ pseudonymous systems could subject the users to unintentional breaches of anti-money laundering and combating the financing of terrorism (AML/CFT) laws. "
anti-money laundering = FEMA, there is no law called AML, there are two laws: FEMA & PMLA. As per the investigation, the right clauses are applied.
very good point. Yes, that is one of the big reasons, for RBI's stand. I have talked to someone in the recent past about their stand on bitcoin, and this was one of the main reasons.
What it means, is that no doubt, bitcoin has many advantages, but at the end of the day, its a "change". All change must come at a pace, acceptable to the mainstream society.
I don't see anyone getting into trouble, as long as the money which you used to purchase bitcoins from them was not already stained.
Of course, people who bought using these sites might have the ED Scanner go over them, but again, nothing to worry unless you have undeclared assets or anything otherwise illegal.
Indians can still do a wire transfer to MTGox and purchase bitcoins.
I would not recommend mtgox, which is known about its delays with withdrawals, and has higher prices than other exchanges. Check out bitstamp, btc-e etc.
I've bought bitcoins from him in the past and I think he was doing a good job, at least for ensuring that his services are not used for money laundering.
ID and address verification documents were needed and a copy of the PAN Card was also taken.
Since all payments are made via bank accounts, It won't be difficult for ED to list out the bitcoin traders even if they were not collecting this information. I wonder how the website's users would be impacted.
he is not arrested, he is under investigation. As you said, he documented all things, than, if there are no descrepencies, he would be allowed to function normally.
