India has arrested five people including two students who allegedly smuggled seven mln rupees’ ($108,000) worth of LSD from the US using Bitcoin.

According to local news publication Times of India, the group, operating in Mumbai, used the virtual currency ship postage stamp-style blots of the drug via courier services.

LSD is colorless and odorless, making it hard to detect. Much like Bitcoin, however, its pseudo-anonymous qualities are no longer a match for sophisticated tracers.

“Our team had received information that this gang has been actively involved in smuggling and supplying LSD or party drugs to several others including celebrities," inspector Sunil Mane of the Mumbai police’s anti-narcotics cell commented.

The operation comes the same week as India’s government reiterated warnings about virtual currency. On Tuesday, Minister of State for Finance Arjun Ram Meghwal said that assets such as Bitcoin “could subject the users to unintentional breaches of anti-money laundering and combating the financing of terrorism laws.”

His comments set off a chain reaction in the media, with commentators fearing businesses could be operating illegally.

In response, local exchange Zebpay prepared a dedicated statement on the matter, in which it said it “believed Bitcoin is not illegal” in India.

“Many new technologies stroke fear especially among regulators as it is their responsibility to protect us. And the same is with bitcoins. We appreciate genuine concerns of our regulators and politicians,” the statement added.