Top Indian Bitcoin operator stops trade after bank warning

December 28, 2013 Leave a comment

Top Indian Bitcoin operator stops trade after bank warning
Saturday, December 28, 2013
AFP

NEW DELHI–India’s biggest Bitcoin trading platform said on its website Friday it had suspended operations after the central bank warned against the risks of using virtual money.BuySellBitCo.in closed its platform, citing an advisory by the Reserve Bank of India issued on Christmas Eve highlighting the risks of trading in digital currencies.

“We are suspending buy and sell operations until we can outline a clearer framework with which to work,” BuySellBitCo.in said on its website, adding that the move was “to protect the interest of our customers.”

The central bank’s warning comes after Bitcoin, which can be stored either virtually or on a user’s hard drive and offers a largely anonymous payment system, had begun gaining popularity in India.

The emergence of Bitcoin and other virtual currencies in India has come despite a traditional preference for assets backed by property and other tangible goods.

“There is no underlying or backing of any asset for virtual currencies and as such their value seems to be a matter of speculation,” the central bank said in its Dec. 24 advisory.

The “huge volatility in the value of virtual currencies has been noticed,” it added.

The central bank stopped shy of issuing a ban or any curbs on Bitcoin or other virtual currencies.

However, because the currencies were not authorized by any central bank or monetary authority there was no established recourse for customers in the case of problems, it said.

The move comes weeks after the People’s Bank of China ordered financial institutions not to provide Bitcoin-related services and products and cautioned against its potential use in money-laundering.

Bitcoin was invented in the wake of the global financial crisis by a mysterious computer guru using the pseudonym Satoshi Nakamotoby.

At the last rate posted by BuySellBitCo.in, which was conducting about 12 million rupees worth of Bitcoin transactions monthly, according to Indian media, one Bitcoin was selling for 48,039 rupees (US$776).

The dollar worth of a Bitcoin has rocketed from just cents in 2010 to a US$1,200 peak in early December, but has since fallen back.

Filed under Macro Trends

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Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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