Crackdown on Bitcoin: Income Tax Department 'surveys' 9 exchanges to identify investors
Meetu Jain & Rajeev Dubey December 13, 2017
As the most popular cryptocurrency touches new highs, the income tax department on Wednesday began its nationwide crackdown on Bitcoin exchanges. Tax sleuths conducted 'surveys' at as many as nine Bitcoin exchanges in the country. During the investigation, the I-T department looked for evidence to establish identity of investors and traders, transactions undertaken by the Bitcoin traders in India.
Bitcoin exchange Coinsecure, which has offices in Delhi and Bangalore, has come out with a statement: "Senior officials from the income tax department conducted a survey across our Delhi and Bangalore offices in an attempt to gauge and comprehend the state of Bitcoin in India... The broad sword of discussions was to understand Bitcoin and cryptocurrencies and their users, The officials had requested data to try and analyse taxability of Bitcoin. Everything was extremely routine and all exchanges in India have gone through the same process cooperating and coordinating with the authorities."
Earlier, reports had suggested that some tax evaders may be parking illicit money in Bitcoin. The monthly trade of bitcoins in India is estimated to be between Rs 5,000 crore - 10,000 crore and an average 50,000 people register daily on Bitcoin exchanges. The virtual currency has seen a whopping 1500 per cent surge in its value in less than a year.
Although, Bitcoin is yet to be officially recognized in the country, the Reserve Bank of India has on three separate occasions put out risk warnings against investing in virtual currencies.
What are bitcoins (BTC)?
An earlier version of this story said - "Business Today photographer Nilotpal Baruah was at one of the bitcoin exchanges, Coinsecure, in Bangalore when the raid began. The investigation team took control of computers, servers and detained all staff, including the founder and CTO Benson Samuel. The income tax officials have sought information on the records maintained by the exchanges to uncover the money trail."
Coinsecure has denied Samuel was detained, saying, "None of our staff were detained nor were computers seized. Benson was pretty much asked questions about the technical side of how Bitcoins work and was asked for various data sets."