Unocoin co-founder and CEO Sathvik Vishwanath was arrested in Bengaluru on October 24, 2018, a day after co-founder Harish B.V. was detained at the company’s cryptocurrency kiosk in Kemp Fort Mall. Police alleged the kiosk lacked required approvals and that Unocoin’s activity violated the law; the company disputed that account. In February 2021, the Karnataka High Court quashed the FIR, charge sheet and related criminal proceedings against the founders.
What was the Unocoin kiosk?
Unocoin, founded in 2013, was one of India’s early cryptocurrency exchanges. Vishwanath was its CEO and a co-founder; Harish B.V. was a co-founder and the company’s chief financial and compliance officer.
The company promoted its Kemp Fort Mall installation as India’s first cryptocurrency or Bitcoin “ATM.” The more precise description is a customer kiosk: users could deposit or withdraw rupees, associate the money with their Unocoin accounts, and use their account balances to buy or sell cryptocurrency through Unocoin’s website or app. It was not described as a conventional bank-network ATM dispensing Bitcoin. The kiosk was reportedly still undergoing checks and was not fully operational when Harish was detained.
Vishwanath later said that calling it an “ATM” was a branding mistake because the term could suggest a connection to the banking system that the machine did not have. The “first” description was Unocoin’s public claim, not a legal classification.
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How did the arrests unfold?
Harish was detained at the mall
On October 23, 2018, Bengaluru police detained Harish at the kiosk in Kemp Fort Mall and subsequently arrested him. Police seized the machine. Contemporary coverage also reported searches at Unocoin’s office and the seizure of items including computers and cash; those accounts describe police actions, not findings that the company had committed an offence.
Vishwanath was arrested the next day
Vishwanath was arrested on October 24, one day after Harish. In his account, published by Quartz and republished by Scroll, he said he expected to be next after Harish was charged. He recalled being at home trying to work out how to secure Harish’s release when officials arrived, took him for questioning, charged him and sent him to judicial custody. Another contemporary report placed his arrest in Tumakuru, so the precise location is not consistent across accounts.
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Vishwanath said he was surprised and concerned by the police response. He denied that Unocoin had promised customers doubled returns or intended to cheat them, and attributed some of the hostility to confusion about cryptocurrency and media descriptions of it as illegal. Those are his recollections and interpretation, rather than independent findings about police motives.
What did police allege, and how did Unocoin respond?
| Police allegations | Unocoin’s position |
|---|---|
| Police said the kiosk had been installed without necessary state-government permissions and alleged that Unocoin was dealing in cryptocurrency outside the legal framework. The FIR reportedly invoked IPC Sections 34, 420, 465, 468, 471, 474 and 120B, as well as Section 66 of the Information Technology Act. | Unocoin argued that the kiosk was not connected to a banking network and facilitated transactions between customers and the company, rather than operating as a bank ATM. Its lawyers said the mall already had the relevant trade permissions and that no additional licence was required. This was the company’s legal position, not a general ruling on kiosk licensing. |
The criminal allegations should not be read as proof of guilt. Nor does describing the machine as a kiosk settle whether its installation or activity complied with applicable rules; those questions formed part of the dispute.
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Was cryptocurrency illegal in India in 2018?
Not in the simple sense that owning or trading cryptocurrency had been made a nationwide crime. The immediate regulatory pressure came from the Reserve Bank of India’s April 6, 2018 circular, which told regulated entities not to provide services to businesses dealing in virtual currencies. That restriction made banking access difficult for crypto exchanges, but it was not itself a blanket criminal ban on cryptocurrency.
The Supreme Court later set aside the RBI circular in Internet and Mobile Association of India v. Reserve Bank of India. The distinction matters: the Unocoin arrests occurred amid restrictive and unsettled regulation, but they do not establish that cryptocurrency itself was illegal across India.
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What happened in the first court proceedings?
Vishwanath filed a habeas corpus petition concerning Harish’s detention. The Karnataka High Court dismissed it after the state told the court Harish had been arrested under a registered FIR and produced before a magistrate. During the proceedings, the court was informed that Vishwanath had also been arrested and was in judicial custody. That 2018 petition addressed the detention; it did not decide the later challenge to the criminal case. Contemporary reporting on the hearing is available from The New Indian Express.
Why were the proceedings quashed in 2021?
In February 2021, the Karnataka High Court quashed the FIR dated October 23, 2018, the May 3, 2019 charge sheet, the cognizance order and the related proceedings in Crime No. 3761/2018 against Unocoin, Harish and Vishwanath. The court’s reasoning followed the Supreme Court’s decision setting aside the RBI circular on which the proceedings had been based. The reported High Court judgment sets out the case history and result.
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Clear out junk files and repair common Windows errorsFree Scan →Fix the driver behind crashes, sound loss and screen glitchesFind Drivers →Quashing those proceedings means the specified criminal case was set aside; it is not a blanket judicial endorsement of every Unocoin decision or every cryptocurrency activity. The outcome also differs from the immediate 2018 habeas corpus ruling, which dealt with Harish’s custody rather than the merits of the charges.
Why the kiosk episode matters
The incident captures three sources of friction in India’s early crypto market: an uncertain regulatory environment, exchanges’ difficulty maintaining banking access, and the consequences of describing a cash-and-account service with familiar banking language. Unocoin’s “ATM” label could evoke a regulated bank machine, while the company said its kiosk served a different function. Police allegations and the company’s defense reflected that disagreement; the later court ruling resolved the specified criminal proceedings on the basis of the RBI circular’s legal status, not by declaring all crypto businesses lawful.
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