Mid October, a picture of the Unocoin’s kiosk was being shared rampantly on social media circles and also stories were run by the mainstream media houses and articles were being published by noted and respected web publishers. By the last week of October 2018, Unocoin and its kiosk was all over in the news and had created a lot of buzz both in Crypto communities and amongst the general public.
On 23rd October we faced a series of unfortunate events which started with the unexpected detaining of Harish BV, CFO, and co-founder of Unocoin. Harish was taken for an inquiry and a subsequential arrest (by the Cyber Crime department, Bangalore) from Kemp Fort Mall in Bengaluru where he along with the team was doing the checks of kiosk before it was made to be accessible for the customers to use. The detaining was on the accusation that, we as a company were not having necessary approvals to set up an ATM.
The kiosk was much publicized since its first appearance in social media with varied observations, understanding, and interpretations. Kiosk’s primary motive was to only allow our customers to withdraw or deposit money (INR) to their Unocoin account subject to all rules governing cash transactions, which could then be used to sell or buy cryptocurrencies from our websites or mobile apps. Our kiosk is designed to only accept cash or give cash of certain denominations to its users just like any other kiosk (Ex: Airtel or Vodafone kiosks where one can pay bills using cash).
This kiosk, understandably, wasn’t connected to any Banking network and hence thereby was NOT like any other Banks’ ATMs or other WhiteLabel ATMs. Since this is a private kiosk, there isn’t any need for procuring any license or an approval of any sort from authorities. Kiosk machines of Unocoin do not fit RBI’s definition of ATM which connects to the banking network.
This idea was conceived and the first kiosk was installed for the sole intention of keeping our business running since our Banking channels had been cut down because of the recent RBI circular. However, truth be told, the kiosk was initially branded as an “ATM” — which was our unintended, genuine and a rather grave mistake as this led to confusion amongst general public including media. Though we rebranded it immediately as Kiosk, it was little too late. Added to that, the false reporting by several media houses on the legality of the cryptocurrencies in India led to a series of unfortunate events that followed later.
The news of detaining Harish spread like a wildfire, not only nationally but also internationally. Several websites and media houses speculated, interpreted the sequence of events in various ways. We, as a team was not in a position to publish a clarification as the entire matter was already sub-judice by then.
While the initial situation was in the process to be controlled, Sathvik Vishwanath — our CEO & Co-founder was also taken into custody on the same accusation making the situation much worse than it already was.
Further, the Cyber Crime Police department stuck to their original accusation — “The ATM kiosk installed by Unocoin at Kemp Fort Mall has not taken any permission from the state government and is dealing in cryptocurrency outside the remit of the law.” until our lawyers intervened with formal explanations.
Unocoin and its lawyers asserted that no assent is necessary to run a kiosk. “It is a kiosk that is being set inside the mall and the mall would have had already taken trade permissions,” said Swaroop Anand, the lawyer representing the Unocoin directors. “Therefore, there was no need for Unocoin to take any other permission and there had not been any violation of license requirements.”
From 23rd October to 31st October 2018, several steps and legal exercises were taken to prove Unocoin as not guilty since the troop of police had detained the co-founders.
The situation finally came under control once the police authorities understood our initiative in its original intent. They also were made aware that we haven’t violated any law in setting up the kiosk and thereby the whole fiasco came to a speedy conclusion albeit some formal legal proceedings. We continue to strive to best serve our customers and keep the crypto community alive with best intentions without violating any rule of the law.
We wholeheartedly reciprocate the support, solidarity, and concern that you showed on us during these tough times and we are grateful for that. Thank you so much from all of us at Unocoin and we hope the same support continues in the coming days.