Indian Bitcoin Exchanges Halted As Government Shifts Capital Control Attention Away From Gold

Tyler Durden's picture

Having failed miserably in the "control" of capital outflows from the Rupee (via Gold), the India government (following a Reserve Bank Of India advisory) has raided one Bitcoin seller and issued a warning cautioning citizens against acquiring and trading virtual currencies. As VentureBeat reports, the RBI did not outright ban the currencies, but it slammed them as risky and potentially illegal. On Thursday, the "Enforcement Division" raided the premises of Mahim Gupta who provides trading platform through his website - - finding it in clear violation of Foreign Exchange Management Act (FEMA) rules. Whether smuggling gold or utilizing Bitcoin, it seems the government is fighting a losing battle...cue confiscation?

India practically "bans" Bitcoin (via VentureBeat)...

Several Bitcoin exchanges in India have suspended operations amid fears they could violate anti-money laundering and financial terrorism laws.

They’re reacting to a warning issued on Tuesday by the Reserve Bank of India, the country’s central bank, which cautions citizens against acquiring and trading virtual currencies. The RBI didn’t outright ban the currencies, but it slammed them as risky and potentially illegal:

It is reported that VCs, such as Bitcoins, are being traded on exchange platforms set up in various jurisdictions whose legal status is also unclear. Hence, the traders of VCs on such platforms are exposed to legal as well as financial risks.


There have been several media reports of the usage of VCs, including Bitcoins, for illicit and illegal activities in several jurisdictions. 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.

First Bitcoin exchange raid has occurred (via DNA India),


We have found that through the website 400 persons have recorded 1,000 transactions that amount to a few crores of rupees. We are gathering the data of the transactions, name of the people who have transacted in the virtual currency from Gupta’s server that is hired in the US. At present, we believe that this is a violation of foreign exchange regulations of the country. If we are able to establish money laundering aspect then he can be arrested,” said a top ED official.

As per sources, a separate raid was also conducted in Satellite area of the city, however, the person the investigation agency was looking for could not be found. “When we reached his office, he was not there. We have sealed the premises,” the official added.


Sources also added that there are a handful of entities that provide trading in the virtual currency in India. “I think there are only five entities. Of these, we believe two are operating from Ahmedabad. We believe that they have channel of agents or people who promote the use of such currency but entities that provide online platform are few,” official said.

Perhaps it is time to confiscate all the gold, computers, and internet access for anyone not invested in stocks?

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Pladizow's picture

As the collapse hastens, gov's will act more and more like cornered rats!

Papasmurf's picture

As the collapse hastens, governments act more and more to corner citizens like rats.

BaBaBouy's picture

Save Your MONEY While You Can From This BIT Shit ...

Pladizow's picture

How about for better or worse, we let the "free" markets decide?

fonestar's picture

Nothing could make fonestar happier as we enter the new year to watch world governments fire the first shots of aggression against Bitcoin.  Bitcoin is stronger than all governments on Earth, stronger than all armies, air forces and navies on Earth, stronger than all politicians on Earth.

Let's remember who the aggressor was in this fight, as we the Satoshis will be the ones to end this war.

fonestar's picture

People who junk this love the .gov.  Traitors and fake libertarians.

Tinky's picture

It's remarkable that you can't see how similar your reaction is to those of the very same Government officials you claim to despise (e.g. "Either you are with us, or you are with the terrorists." - GWB, September 2001).

MeelionDollerBogus's picture

I think you are a fake libertarian. leading suckers down the garden path to global digital currency, the wet dream of all the financial elites - a currency you can't ever physically disconnect from their web. Gives them supreme ultimate god-power of the entire Earth for eternity.

fucking fool.

outamyeffinway's picture

You're the fucking fool who doesn't see reality before his face!


You are already using digital currency, fucking fool! And you think in a DIGITAL AGE, digital currencies are going away???


Who is more the fool?

MeelionDollerBogus's picture

obviously you.
You think the digital age will last. It will not.
The steam age did not.
The iron age did not.
The bronze age did not.
Before you know it, computing will be ubuquitious, biological, nanocomputers, living machines, and wires, CPU's and RAM chips will be obsolete and bitcoin will be too.
By that time we'll be able to manufacture many medicines within our own bodies.
And by that time the kinds of lethal bio-weapons that exist will make ebola look like pancakes with cherries on top.
The world coming is a scary place & your mind is not made for it.
Can you fix that?

margaris's picture

steam age didn't go away.... bronze age and iron age didn't too. We use all of that today still.

Those ages build on top of each other and complement each other.


One World Mafia's picture

Bitcoin has three types of encryption one of which was designed by the NSA, SHA-256, another of which the NSA prefers for easy manipulation, eliptic curves systems, and the last which looks like it's already been cracked by hackers, RIPEMD160 so you know the NSA has no trouble using it as a backdoor.  No big data centers needed to mine.  The govt may already own the lion's share of the half that have already been mined.

"Prefer conventional discrete-log-based systems over elliptic-curve systems; the latter have constants that the NSA influences when they can."

As with the dollar, the govt isn't satisfied merely in controling the issuance of currency, it wants to tax every transaction it can.

MeelionDollerBogus's picture

big ASIC centers are needed to mine, exponentially bigger on a linear time-scale.
big STORAGE centers are needed to store the blockchain once it gets too big.
It's getting exponentially bigger vs linear time.
Eventually only cloud-storage will handle that and it will be government cloud storage, owned partly, completely, openly or secretly, by hostile enemies to personal financial freedom, even freedom to walk/bike / ride a horse to another safer place to live, or more affordable place to live.

"As with the dollar, the govt isn't satisfied merely in controling the issuance of currency, it wants to tax every transaction it can"
well of course - the purpose of the slave-collar (dollar) is to enslave (extract work-value / asset-value by force).

Ever see "In Time" ( Think of something along those lines. Digital currency with the emerging biotech is the last, last possible thing we should ever want. Ever.

Grosvenor Pkwy's picture

How can they control 100's of variations of alt currencies?

One World Mafia's picture

Of the three I looked at: Bitcoin, Litecoin, Zerocoin - NSA are in all three.  Maybe a few true ones will slip in but how will you know?  In these cases the NSA left a trail, but people still defend bitcoin.  Being open source isn't protecting it afterall.


MeelionDollerBogus's picture

yes it is. Just replace any suspect parts with other parts.
And don't build the entire thing on a basis that one suspect part removed will stop the entire thing from working.
SHA256 is not the weakness, NSA is not in bitcoin.
FEDERAL RESERVE is in bitcoin - they can print money & buy any amount at any price, high or low.

One World Mafia's picture

The bitcoin community has been very resistant to acknowledge the evidence and very protective of their investment.

The Federal Reserve still has a debt ceiling so if it prints to buy bitcoin it will find itself asking congress to move the ceiling higher again, but it doesn't have to when the NSA likely has stockpiled virtual currency and can mine with backdoors.  With backdoors they make tons of money.

MeelionDollerBogus's picture

Understandable mistake on your part but I didn't -1 you.
The Federal Reserve has NO DEBT LIMIT.
The TREASURY has a debt limit so the Fed is within that for buying bonds.
It can't buy what's not for sale & what's over the debt limit is not for sale.
The Fed can print & lend any amount it wants with zero accountability to anyone.
This was highlighted by Grayson demanding straight answers from The Bernank only to get told "No".
Flat out, not telling you.

MeelionDollerBogus's picture

Depends. For each one that is not offered on fiat exchanges some analysis is needed for the weaknesses. The primary weakness is the network itself, not the algorithms: just block all packets which are not identified as valid for another purpose. ALL.

For those which are offered on any fiat exchange PRINT MONEY and buy them all. Buy/sell/crash/repeat until people are scared shitless to touch any. then buy them all & declare them all government property / bank property. Forever.

One World Mafia's picture

If one emerges they can't control - which is unlikely - they can do all that.

MeelionDollerBogus's picture

well, they can't control gold in-person trades.

If you wanted to really secure the infrastructure you'd find a way to infiltrate SWIFT so it piggybacked bitcoin, litecoin, etc., and destruction of the physical infrastructure would kick themselves in the balls, transcoding the packets you need in with their packets and finding a way to make them LOOK like theirs until they figure out how to filter them (which they would).

For a while it would kick them in the balls but you'd need a way to insert packets & to read them while acknowledging SWIFT is a secure network with militaries on several ends.

Grosvenor Pkwy's picture

This is software. Nothing is fixed and unchangeable. If Bitcoin encryption is found to be unsecure, a new alt currency can be created in a very short time. If backdoors, trap doors, hack doors are found, they can be patched, updated, or new software can be written.

One World Mafia's picture

Bitcoin developer Gregory Maxwell: “Problems with SHA-256 would be potentially more problematic as we cannot replace it in a backwards compatible way.”

NSA has been in it for years.

Exponere Mendaces's picture

I see @One World Tinfoil is back at it again. Man, at least VARY your text sometimes, you know? Or else people can tell you're just a cut-n-pasting barking seal troll.

Same old ignorance about SHA, Elliptic Curve Systems (Bitcoin doesn't use the NSA flavor) and more...

What's the encore, I wonder? But then again, he's probably a bot.

One World Mafia's picture

You ignore but can't dispute the NSA controls it.

TheHound73's picture

It is hard to prove a negative.  Fight bitcoin all you like and keep jibber-jabbering on the internets, making BTC cheaper for me to acquire.

Pseudonymous's picture

Maybe he is actually an anarchist at heart...

uranian's picture

I find this logic quite remarkable. Governments all over the place are trying to stop their citizens from using Bitcoin, therefore Bitcoin is a NWO currency.


One thing I'll say for the general degree of skepticism aimed at Bitcoin at a relatively free thinking group such as ZH; we must be nearer the beginning than the conclusion if even people as bright as ZHers generally are so against it. I find it really surprising that so many people lob around words like tulips in reference to Bitcoin; here's the first currency since gold and silver that involves no bank, is completely decentralised and involves a whole slew of competing currencies. What is not to like about a currency that involves no bank, ye sceptics of ZH?

One World Mafia's picture

The Indian govt is not stopping it.  It is making sure it can tax every transaction it can.  Just what I would expect of a govt controlled digital currency.

jefferson32's picture

Everyone loves how the Internet is enabling the separation of money and state. Bitcoin is certainly a manifestation of that historical process. So I love it - but my savings are in gold.

MeelionDollerBogus's picture

LOL. Trying to stop? There is no "trying".
If they wanted to actually stop it, it would be stopped already.
You keep falling for the puppet show thinking it's the real deal.

Raise your IQ a couple of notches, look at the situation again, see if you can figure it out.

Seasmoke's picture

Im  rooting for you, I really am !!....But Im going to have to sit this one out

fonestar's picture

Any act of faith in support of Bitcoin will receive 1,000 blessings from Satoshi.

Anglo Hondo's picture

Hey, fonestar, a thousand blessings?  I was hoping for 75 virgins.


Harlequin001's picture

and not a few enquiries from the Internal Revenuse Service it seems...

it appears that 1,000 satoshi blessings = fuck all squared now...

Kirk2NCC1701's picture

Good luck in finding even 1, who's over 18. 

ElvisDog's picture

Me too. Call me coward or statist if you want, but if bitcoin or other cryptocurrencies eventually "win" there will be a lot of collateral damage first - jail, asset confiscation, tax liens, etc. I'll let fonestar lead the charge and take the financial/legal bullets. I've got a wife and family to support. Can really do that from gitmo.

margaris's picture

There is an expression:

no one wants to be first.

EVERYONE wants to be second.

If you let the nazis kidnap your neighbour, and sit idly by, what makes you think that they will not come for you one day?

Who will stand up for you, when they come after you?


If millions of people would stand up, the government bureaucrats would have no chance!

Either we hang together or we hang separately.


Harlequin001's picture

What's this 'we' paleface?

as Tonto said to the Lone Ranger..

margaris's picture

"we" is all freedom loving people.

Free by nature, turned into slaves by government.

ElvisDog's picture

Yeah, yeah, everyone likes to play the "Nazi" card when they're feeling morally superior. You sound like Karl Denninger calling for his million man march on Washington.

margaris's picture

I use "nazi" as a codeword for "very aggressive statist".

margaris's picture

if bitcoin wins, then statists will lose control.

If they lose control they are less powerful.


Less powerful people tend to compensate their weakness by being extremely aggressive.


You shouldn't be afraid when your government gets aggressive.

Because they lose all legitimacy then, and you need to just hang on a little longer, ... in the end freedom will win.



Pseudonymous's picture

Leaving aside the fact that you are indeed being effectively a coward and a statist, which might or might not have unforeseen adverse effects for you, your wife or your family, I hope you do realize that there are ways to support cryptocurrencies without risking any backlash from other cowards or statists, if you so desired. You could start by using Tor, which is safe from NSA surveillance, to get bitcoins or other cryptocurrencies in one of several ways: selling a digital good or service online, mining, etc. You will find everything you need if you look for it.

Also you could acquire bitcoins in a non-anonymous way, save it securely (e.g. a "brain wallet" consists solely of a passphrase that you keep in your brain) and simply not give it away to other cowards or statists. What the hell?

When I think of it, maybe you are actually a very undaunted anarchist. Maybe you are willing to sacrifice yourself, your wife and your family supporting the state, just to prove how utterly bad it is. Go ahead. Do whatever you want.

TeMpTeK's picture

The exchange windows are all brick and mortar establishments with bank accounts who will be heavily regulated and molested into submission by the banking oligarchy....i love the BTC idea but....." this shit has not been authorized by your overlords"

If all the govts of the world make it a problem to cash out, how long before you run out of those willing cash in?

MeelionDollerBogus's picture

when all the airwaves are jammed and all the routers are blocking bitcoin packets and all the wires are cut where that doesn't work, you'll be right-proper fucked.

One World Mafia's picture

The gov would only do that to a virtual currency it didn't invent.

MeelionDollerBogus's picture

it will do it with dollars too - they invented that.