Authorities in India have found themselves in a crypto-conundrum: they can’t access cryptocurrency seized from a Ponzi scheme because such transfers have been prohibited, reports Times of India.
To make matters worse, police had hired the now-defunct cryptocurrency exchange Koinex to convert Rs 8.42 crore ($1.19 million) of the seized Bitcoin into local currency — but the company’s banking partner froze its account as a result.
A series of requests have reportedly been filed with the country’s supreme court to resolve the matter.
Specifically, a police petition challenges a Reserve Bank of India (RBI) circular that bars financial institutions from handling virtual currency. A Koinex request demands the RBI force its banking partner to unfreeze its account.
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Perhaps the most curious aspect of the situation is that the RBI has reportedly now denied locking Koinex’ account while claiming it hadn’t directed the firm’s bank to do so, either.
These denials come despite confirmation from a cyberpolice senior inspector that the seized funds were unable to be accessed due to a frozen bank account.
So, while India’s lawmakers have repeatedly taken steps to ban cryptocurrency under the guise of protecting citizens from poor investments, it’s likely this sticky situation is deliciously ironic to Bitcoin fans — and rightly so.
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