AI Uncovers Four-Year-Old Zcash Flaw, Raising Crypto Security Concerns
India’s cryptocurrency market continues to operate under a fragmented regulatory framework, with different authorities overseeing separate parts of virtual digital asset activity. The country has no single law or regulator with overall control of crypto.
Virtual digital assets, or VDAs, are covered under tax rules and anti-money laundering requirements. Their treatment can also depend on the nature of a token and the activity linked to it. This creates different legal obligations for the same crypto asset.
Multiple Authorities Handle Crypto Rules
The Reserve Bank of India oversees monetary and financial stability. Its position is that crypto is not legal tender. The RBI also maintains concerns over the exposure of regulated financial entities to crypto assets. The Securities and Exchange Board of India has a different role. It is not currently a general crypto regulator. However, tokens that function as securities could fall within the securities regulator’s area of interest.
Tax authorities also have specific responsibilities. The CBDT and CBIC handle VDA taxation under existing rules. The framework includes a 30% tax on gains and 1% TDS on applicable VDA transactions. An 18% GST applies to platform fees. The Financial Intelligence Unit-India handles another part of the framework. Crypto exchanges covered by the Prevention of Money Laundering Act must register, follow KYC requirements and report suspicious transactions. The article says 54 VDA service providers were registered by July 2026.
Clearer Framework
The Standing Committee on Finance also highlighted the regulatory gap. Its 2025 report said VDAs were “presently unregulated in India, except for the limited purposes of taxation, prevention of money laundering and reporting.” The committee recommended an interim framework involving self-regulatory organisations under SEBI or RBI oversight. It also called for clearer classification of VDAs and phased statutory supervision.
Crypto compliance expanded through existing laws even without a dedicated crypto statute. From April 1, 2026, exchanges must report transaction-level VDA information to the income tax department. The framework also includes penalties for delayed or inaccurate reporting.
The article cites estimates that around 39 million Indians held approximately USD 2.1 billion in crypto by the end of May 2026. It argues that businesses must assess each crypto activity separately and identify the relevant regulatory requirements. The broader issue is the absence of one law that explains how the existing tax, AML, securities and monetary rules fit together. Until Parliament creates a comprehensive framework, crypto businesses must navigate several regulatory layers at the same time.
Disclaimer : Crypto News India does not recommend that any cryptocurrency should be bought, sold, or held by you. Do conduct your own due diligence and consult your financial advisor before making any investment decisions.
