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RoC Forbids Cryptocurrency Exchanges From Registering Under Companies Act, 2013

RoC Forbids Cryptocurrency Exchanges From Registering Under Companies Act, 2013

The Move Has Come After Top Payment Service Providers Stopped Their Services To Cryptocurrency Exchanges

While South Korea has asked Bitcoin traders to reveal their identity, India has gone all out to shut all doors pertaining to cryptocurrency trading in the country.

As part of the latest move, the Registrar of Companies (RoC), MCA has stopped registering cryptocurrency exchanges under the Companies Act, 2013, reports Business Standard.

As per the report, the Ministry of Corporate Affairs wing has asked for an undertaking from software development or information technology companies that they will not deal with cryptocurrencies.

When contacted by Inc42, one official from RoC, Delhi, confirmed the report, “Yes, we have been told that Bitcoin trading is illegal in India, and hence we have stopped the registration of new cryptocurrency exchanges.”

Inc42, earlier in its exclusive report, had mentioned how banks have almost stopped their services to cryptocurrency exchanges. Cryptocurrency trading, which otherwise should have been faster than conventional asset trading, is now taking hours to weeks for the confirmation.

Speaking to Inc42, Praveen Kumar, founder and CEO of Malaysia-based Belfrics Group which operates in India as well, confirmed, “This is slightly an old story as we had stopped taking deposits few weeks before itself even though we have not troubled by any bank. Many Payment Service Providers (PSP) have stopped giving services to exchanges.”

It is worth noting that the Indian government has already equated Bitcoin and other cryptocurrencies with Ponzi schemes. In response to Rajya Sabha MP Rajeev Chandrasekhar’s query, Union Finance Minister Arun Jaitley had informed the parliament that the Indian government is seeking expert opinion on how to block Bitcoin and other cryptocurrencies trading in India. Jaitley had stated at the time, “The number of Bitcoin traders is huge, it can’t be stopped all of a sudden.”

One of the founders of a new cryptocurrency exchange, wanting to get the exchange registered under MCA, informed BS, “I tried to register my company in December, but the RoC didn’t accept my request. The company’s name had the term ‘bitcoin’ and the RoC said it wouldn’t support it.”

FM Arun Jaitley had earlier clarified that neither the government nor the Reserve Bank of India has authorised any virtual currencies (VCs) as a medium of exchange. Further, the government or any other regulator in India has not given license to any agency for working as an exchange or any other kind of intermediary for any VC. Persons dealing in them must consider these facts and beware of the risks involved in dealing in VCs.

Meanwhile, as South Korea has further hardened its stance, Bitcoin is back to $10K.