• Is bitcoin legal?

Is buying, holding and selling bitcoin legal for an indian citizen? Which laws apply? I'd like to retain a copy of applicable law for my purposes.

If bitcoin is legal:

1) if someone buys bitcoins and after that the govt suddenly decides to declare bitcoin illegal, what happens to the money and how to convert it back to rupees?
Asked 7 years ago in Business Law

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4 Answers

RBI, on December 24, 2013, issued a press release on virtual currencies like bitcoins, litecoins,bbqcoins, dogecoins stating that creation, trade and usage of virtual currencies as a medium for payment is not authorized by any central bank or monetary authority.

2) it is not legal in india

Ajay Sethi
Advocate, Mumbai
95215 Answers
7611 Consultations

5.0 on 5.0

One issue in Thailand is not so much the legality of owning bitcoin, but whether exchanges qualify for a licence to trade in cryptocurrencies, which could be considered a foreign exchange activity and therefore illegal.Some days back, soon after the RBI issued an advisory to public not buy and sell virtual currency Bitcoins, the ED conducted searches on two Ahmedabad-based entities.

The ED found that both the Bitcoin operators had violated Foreign Exchange Management Act (FEMA) since the RBI does not permit such transactions.

Devajyoti Barman
Advocate, Kolkata
22920 Answers
498 Consultations

5.0 on 5.0

bit coin is not approved by the government therefore it is not legal tender. you cannot claim any loss if incurred by you in respect of payment in bitcoin.

Shivendra Pratap Singh
Advocate, Lucknow
5127 Answers
78 Consultations

4.9 on 5.0

Bitcoin is a cryptography based digital currency.

At present, there are no regulations governing virtual currencies like bitcoins in India. RBI, on December 24, 2013, issued a press release on virtual currencies like bitcoins, litecoins, bbqcoins, dogecoins stating that creation, trade and usage of virtual currencies as a medium for payment is not authorized by any central bank or monetary authority.

Further, RBI has cautioned virtual currency traders and users to various security related risks such as hacking, malware attack etc.

While RBI has not legalized bitcoins, it has declared them unauthorized as of now.

Indian laws do not define digital currency or virtual currency, but the term currency is defined in section 2(h) of the Foreign Exchange Management Act, 1999 (“FEMA”) in the following words:

“currency” includes all currency notes, postal notes, postal orders, money orders, cheques, drafts, travellers cheques, letters of credit, bills of exchange and promissory notes, credit cards or such other similar instruments, as may be notified by the Reserve Bank;

Bitcoins cannot be classified as regular financial instruments such as ‘currency’, ‘security’, ‘derivative’ or ‘negotiable instruments’ as these instruments are currently defined under Indian law.

RBI is currently examining the risks associated with the usage, holding and trading of virtual currencies under the extant legal and regulatory framework of India, including foreign exchange and payment systems laws and regulations.

Thus as of now there is no legal sanction for bit coin mining in India and there are no laws to support bit coin trading or mining in India.

Your question that what will happen to your money already invested if government suddenly decides to declare bitcoin illegal, you should understand the fact that government has not legalised this kind of trade or mining or practice as legal so far, then there is no question of banning a non-existent item.

Though this trade is abundantly going on in a wide scale but when it comes to law, the people involved or engaged are liable to answer the law or face consequences.

T Kalaiselvan
Advocate, Vellore
85416 Answers
2239 Consultations

5.0 on 5.0

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