The Karnataka High Court quashed the criminal case registered against the founders of Unocoin, a virtual currency exchange company, for setting up a bitcoin ATM in Bengaluru in 2018. It was installed at the Kemp Fort Mall in October 2018 amid fanfare before it was seized a week later by Cyber Crime police officials, who stated that the company had not taken necessary permissions to install the ATM.
A single-judge bench of Justice HP Sandesh quashed and set aside the case against Unocoin and its co-founders Sathvik Vishwanath and Harish BV. The duo were booked by Cyber Crime police in Bengaluru who cited a circular issued by the Reserve Bank of India regulating entities including banks from dealing with virtual currencies.
Following the arrest in 2018, Unocoin released a statement claiming that the ATM was not connected to a banking network and did not fit the RBI's definition of an ATM. "The 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," Unocoin said in a statement.
The company said that it was similar to kiosks set up by Airtel and Vodafone when people can pay bills using cash. The police on its part stuck to its 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.”
More than two years after the seizure, the High Court has quashed the FIR against Unocoin. The company's co-founder Sathvik Vishwanath released a statement saying that the FIR is quashed. "The co-founders had approached Honourable High Court of Karnataka appealing that the charges are baseless and invalid. The High Court after hearing the arguments have provided the verdict on 8th Feb 2021 saying that the FIR is quashed (declared invalid and the case is dismissed)," he said.