Crypto Risks in India
When you talk about crypto risks in India, the unique combination of regulatory ambiguity, rising fraud, and sudden policy shifts that make crypto trading here more dangerous than in most markets. Also known as Indian cryptocurrency dangers, it’s not just about market swings—it’s about losing access to your funds because a bank blocks a withdrawal, or a platform vanishes overnight with no warning.
One major Indian crypto regulations, the shifting legal stance from the Reserve Bank of India and the Income Tax Department that creates confusion even for experienced users. Also known as CBR crypto rules, these aren’t static laws—they change every year. In 2021, banks were told to cut off crypto clients. By 2024, that ban was lifted, but now exchanges must register as VASPs and report every transaction. If you’re not tracking this, you could be caught off guard when your wallet gets frozen or your income gets flagged. Then there’s crypto scams in India, a booming industry that preys on young, tech-savvy users who think they’re getting in early on the next big thing. Also known as fake crypto projects India, these aren’t just phishing emails—they’re Telegram groups with fake influencers, Ponzi schemes disguised as staking apps, and airdrops that ask for your seed phrase. The Central Bank of India has warned about over 150 such scams since 2022, and most victims are under 30.
And don’t forget crypto taxation India, a 30% tax on all gains, plus a 1% TDS on every trade, with no offset for losses. Also known as Indian crypto tax rules, this system doesn’t just take money—it discourages long-term holding. If you buy Bitcoin at ₹40L and sell at ₹45L, you pay ₹1.5L in tax even if you still hold the rest. No other country taxes every single trade like this. That’s why many Indians use P2P platforms like Binance Peer-to-Peer or LocalBitcoins—to avoid bank trails and reduce paper trails.
The real danger isn’t Bitcoin dropping 10% or Ethereum staking rewards slowing down. It’s that you could wake up one day and find your UPI link blocked, your bank account frozen, or your wallet address flagged by a government monitoring tool. There’s no safety net. No FDIC insurance. No legal recourse if a local exchange disappears. The posts below show you exactly how this plays out: from the 600,000 Bangladeshis using Binance despite a ban (a warning sign for India), to how Iranian users bypass sanctions using the same tactics Indians now use to dodge banking blocks. You’ll see real cases—like the Thodex scam in Turkey—that mirror what’s happening in Mumbai and Delhi right now. These aren’t hypotheticals. They’re happening now, to real people. And if you’re trading crypto in India, you’re one click away from becoming one of them.
- By Eva van den Bergh
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- 6 Dec 2025
India's Unregulated Crypto Status: Risks and Opportunities for Traders
India allows crypto trading but imposes heavy taxes and offers no legal protection. Traders face risks from scams, exchange failures, and sudden policy changes-yet opportunities remain for those who navigate the uncertainty carefully.