Bitcoin Users In India Vulnerable To Legal Actions: RBI

Reserve Bank of India (RBI) has reiterated what was explicit and was expected. Through a public advisory RBI declared that use of Bitcoins in India is legally risky. The advisory of RBI is in conformity with the views expressed by Perry4Law so far.

By taking this stand RBI has also clarified that use of Bitcoins in India must be in compliance with Indian laws. Otherwise, civil and criminal prosecutions can be initiated against the users of Bitcoins in India.

The legality of Bitcoins in India was never guaranteed. However, in order to jump upon the wagon band of Bitcoins, many Bitcoins entrepreneurs and stakeholders are openly violating the laws of India, especially the cyber law of India.

Techno legal experts have been maintaining that it is legally wrong to assume that dealings in Bitcoins in India if strictly legal as individuals and companies have to take care of the cyber law due diligence and Internet intermediary rules compliances. For instance, a platform selling and purchasing or trading in Bitcoins must not only comply with the provisions of Information Technology Act, 2000 but also with laws applicable to online trading and income tax.

With the present advisory, the websites and individuals dealing in Bitcoins in any manner whatsoever must comply with the techno legal requirements of Indian laws. Otherwise, they may find themselves in big trouble.

Cyber Frauds Due Diligence In Indian Companies Is Missing

The corporate environment is changing in India at a rapid rate. The Indian Companies Act, 2013 (PDF) has played a major role in the corporate environment of India. The Act has put a special emphasis on frauds investigation and sound corporate governance. The Serious Frauds Investigation Office (SFIO) has been entrusted with a greater responsibility to avoid commission of serious frauds by companies in India.

IT and cyber frauds in Indian companies are increasing. By their very nature these high profile crimes affect corporate sector. Indian companies are also facing increased corporate frauds, financial frauds, white color crimes and technological frauds. In order to prevent black money from being accumulated offshore, the Indian government has proposed establishment of Income Tax Overseas Units (ITOUs) of India in foreign countries.

As far as international aspects of cyber crimes are concerned, India has entered into mutual legal assistance treaties (MLAT) with many countries around the world. An Indo-American alert, watch and warn network for real time information sharing in cyber crime cases has also been established.

As per the Information Technology Act, 2000 and the Information Technology (Intermediary Guidelines) Rules, 2011, an Indian company providing technology and online services in India is an intermediary and it is required to follow cyber law due diligence to escape Internet intermediary liability in India. So if cyber crimes are committed using its network or infrastructure then such company is required to observe cyber law due diligence to escape Internet intermediary liability.

According to Perry4Law, the leading techno legal law firm of Asia, corporate frauds, financial frauds and cyber crimes are still on rise in India. Companies in India are not at all following cyber law due diligence requirements and this has resulted in increased cyber crimes and online frauds in India. These irregularities and crimes can be easily detected if an e-discovery exercise is undertaken by law enforcement agencies of India.

However, Indian companies, especially the telecom companies, are openly violating the laws of India. For instance, Tata Teleservices Limited (TTL) and Airtel are violating Indian cyber law that also to the full knowledge of department of telecommunication. Such violations must be stringently taken by Indian government and its departments.

In their own interest, Indian companies must observe cyber law due diligence so that cyber crimes and frauds can not only be prevented but they can also be successfully prosecuted.