India must not shy away from crypto regulations: CoinDCX CEO says

It has been roughly 3 years since higher taxes were imposed on crypto transactions. There was no mention of crypto in the last Budget. I hope crypto finds some mention in this Budget, and some relaxation is granted on crypto taxation.

We have seen the damage done in domestic industry due to higher taxes. After the implementation of 1 per cent TDS, higher taxation and no loss offsetting, what we find is that Indian customers do not feel economic sense to trade on domestic exchanges. Over 90 per cent of volume has shifted offshore, which is roughly around ₹6 lakh crore. 

 The unintended consequences of higher tax were very harmful for country. First, the tax revenue has gone. I am believer of clean, regulatory compliant companies operating in the crypto space. And efforts must be taken to steer industry towards that direction to keep bad actors weeded out of ecosystem…

The crypto ecosystem has changed significantly over the past years. Incoming US President Donald Trump will likely pass various administrative orders related to crypto. When various other jurisdictions are taking such a pro-active approach, India should not shy away. .

 As an entrepreneur in this space, my worry is that if we don’t work on it now, then 2026 will be very late as many countries would have progressed on this front. It is happening very fast, in 2025 I do see not just US, but many other countries will also start taking positive moves. If we don’t solve for taxation now, we will lose out on lot of innovation, talent and value getting added to the GDP…

Presently, there is not enough concrete information for me to be able to comment. There are a lot of external dependencies. All I know is that Indian customers have been impacted due to security breach and that also directly impacts user sentiment.

As we want to play an active role in growing the ecosystem, we are here to perform whatever is required to help customers regain confidence. Of course, we will get the business but as a market leader it is critical for us to act. 

Honestly, it is not in my hands. There are many court proceedings and other factors. But we remain open to the idea of helping impacted customers. We are even ready to put money out of our pocket to compensate for whatever loss we can.

I am not saying that we will do 100 per cent because it is a large quantum, but having built a large platform, we can give benefit to impacted users directly and indirectly. Maybe once the court clearance happens, within a month or two we will have an update, but yes the intent is there. 

 Not actively. I want to keep things very transparent. Some of our team members have had some conversations in terms of how they are thinking about it. We want customers in our community to have clarity. 

 A 100 per cent safety cannot be guaranteed. Even if you look at Coinbase and Binance, they have also gone through security breaches. I think what matters is, how you react. Do you react in a way where customers are getting impacted or in a way where customers do not get impacted. You should be able to absorb losses via your own reserves or by raising funds, but customers must not be impacted.

That kind of process has to be adopted more and the way to solve it is having some form of regulatory guidelines… In case of WazirX, I believe they could have handled it better… In our case, we have implemented robust measures to safeguard our customers in the unlikely event of an incident.

This includes the establishment of the crypto investor protection fund to provide an additional layer of security. Furthermore, customer funds are held in insured wallets, ensuring that our users are never burdened in challenging situations.

I am happy to know that the new RBI Governor is appreciative of newer technology and innovation. I have had the privilege of interacting with him few times. He is certainly lot more knowledgable about this space.

The perspective of RBI towards using crypto as technology is improving and hopefully it will continue. Interactions also happens bilaterally between countries. We know that many countries, large and smaller ones, have changed their stance completely and are openly accepting this innovation. My belief is that India will gradually open up. ENDS