Fri, 20 Sep 2019

NEW DELHI - Several Indian bitcoin or virtual currency operators have suspended their business, at least temporarily, within days of India's central bank issuing a warning that these currencies carry potential money laundering and cyber security risks.

Buysellbitco.in, is among the bitcoin operators in India to have shut shop. It's website now states: "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," it said, PTI news agency reported Thursday.

Bitcoin is a virtual currency which in barely three years of its existence has become the world's most expensive currency. Governments have been striving to better understand virtual currencies and how to regulate them this year in light of the meteoric price rise of bitcoin, the most famous of such currencies. Bitcoin pushed above $1,000 in late November after trading around $13 at the start of 2013.

Following warnings by central banks of several nations, the bitcoin has slipped from its lofty position.

In a warning issued Tuesday, the Reserve Bank of India specifically named bitcoin, joining an increasing number of central banks to look at how these currencies fit into legal and regulatory frameworks.

"The Reserve Bank of India has today cautioned the users, holders and traders of virtual currencies (VCs), including Bitcoins, about the potential financial, operational, legal, customer protection and security related risks that they are exposing themselves to," the central bank said in a statement.

"The creation, trading or usage of VCs including Bitcoins, as a medium for payment are not authorized by any central bank or monetary authority. No regulatory approvals, registration or authorization is stated to have been obtained by the entities concerned for carrying on such activities."

The RBI warning echoed concerns voiced by the European Banking Authority and the People's Bank of China., which has in fact banned its use as a currency while allowing the trading at individual's own risk.

Within days of the RBI advisory, a number of entities offering bitcoin services have suspended their operations, temporarily or indefinitely, while websites of a few others like INRBTC.com have gone down.

Many other websites offering bitcoin services in India have similarly become inaccessible. A few are however still in operation even as RBI is yet to come out with a clear regulatory framework for bitcoins.

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