Crypto Exchange Restrictions for Indian Citizens in 2025: What You Can and Can't Do

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Indian citizens can still trade cryptocurrency - but not anywhere they want. As of October 2025, the Indian government has blocked access to at least 15 major offshore crypto exchanges that refuse to register with the Financial Intelligence Unit - India (FIU-IND). Platforms like Binance, KuCoin, OKX, Bybit, Huione, Paxful, CEX.IO, and BitMex are no longer accessible through their apps or websites within India. This isn’t a ban on crypto. It’s a crackdown on unregistered platforms. The truth is simple: if you’re an Indian citizen, you’re not breaking the law by buying or selling Bitcoin or Ethereum. But if you use an exchange that doesn’t follow Indian rules, you’re playing with fire. Crypto exchanges operating in India - even if they’re based overseas - must register as Virtual Digital Asset Service Providers (VDA SPs) with FIU-IND. This isn’t optional. It’s a legal requirement under the Prevention of Money Laundering Act (PMLA), 2002. The government doesn’t care if your exchange is in Singapore, the Seychelles, or Malta. If it’s targeting Indian users, it must comply. So what happens if you try to use one of these blocked apps? Your phone won’t let you download it from the Google Play Store or Apple App Store. If you sideload it or use a VPN, you’re technically violating Indian law. The government doesn’t arrest individuals for using VPNs to access crypto exchanges - yet. But they’ve made it clear: they’re watching. And they’re tracking transactions. The crackdown isn’t random. It’s the second wave. Two years ago, the same agencies targeted nine big names. This time, they went after 25 more. The message is loud and clear: register or get blocked. There are about 50 crypto exchanges currently registered with FIU-IND. That means you still have options. WazirX, CoinDCX, ZebPay, and Bitbns are all compliant. They follow the rules. They report your trades. They collect your KYC. And they’ve been given the green light to operate in India. But here’s the catch: these compliant exchanges are smaller. Their liquidity is lower. Their trading pairs are limited. You won’t find 1,000 different altcoins like you can on Binance. You’ll get Bitcoin, Ethereum, Solana, maybe a few others. If you’re used to trading lesser-known tokens, you’ll feel the squeeze. And then there’s the tax. India has the highest crypto tax rate in the world. Every time you make a profit from trading, selling, or swapping crypto, you pay 30% in income tax. No deductions. No offsets. Even if you lost money on other trades, that 30% still applies. On top of that, every single transfer - whether you’re buying, selling, or sending crypto to a friend - triggers a 1% Tax Deducted at Source (TDS). That 1% TDS adds up fast. If you trade $1,000 worth of Bitcoin, $10 is automatically taken out before you even see the money. Do that five times a month? That’s $50 gone. And the exchange doesn’t ask you if you want it. It just takes it. This isn’t just about revenue. It’s about control. The government wants to know who’s trading what, when, and how much. Every transaction on a registered exchange is reported to FIU-IND. Your name, your ID, your transaction history - all stored. If you’re using an unregistered exchange, your data isn’t tracked. That’s why the government hates them. The Reserve Bank of India (RBI) still warns that crypto is risky. They call it a threat to financial stability. Meanwhile, the Ministry of Finance is drafting a bill to ban private cryptocurrencies entirely. That bill hasn’t been introduced in Parliament yet. But it’s still on the table. That’s the big uncertainty hanging over every Indian crypto user. SEBI, India’s stock market regulator, has a different view. They’ve suggested crypto should be treated like securities - regulated, supervised, and integrated into the formal financial system. That’s the future they’re pushing for: crypto as a legitimate asset class, not a shadow economy. So where does that leave you? If you’re a casual holder - you bought Bitcoin in 2021 and still have it - you’re mostly fine. Just pay your taxes. File your returns. Keep records. If you’re an active trader - you buy and sell daily - you’re facing serious hurdles. The 30% tax eats into profits. The 1% TDS makes every trade expensive. The limited liquidity on compliant exchanges means you can’t always get the price you want. And if you try to bypass the system with a VPN and an unregistered exchange, you risk future legal consequences. Some people argue that India’s approach is hypocritical. They point out that the government is building its own digital currency - the Digital Rupee - while cracking down on private crypto. That’s true. But the difference is control. The Digital Rupee is fully traceable. Every transaction is logged by the RBI. Crypto, if unregulated, isn’t. The government doesn’t want to ban crypto. It wants to own it. What’s next? More blocks. More registrations. More taxes. The FIU-IND will keep issuing notices. More offshore exchanges will be forced to shut down access to Indian users. The registered exchanges will grow. They’ll add more coins. They’ll improve their apps. But they’ll also become more like banks - more paperwork, more limits, more surveillance. There’s no magic fix. No loophole. No way around the rules without risk. If you want to trade crypto legally in India today, you have one path: use a registered exchange. Pay the 30% tax. Accept the 1% TDS. And hope the government doesn’t change the rules again. Because in India, crypto isn’t illegal. But it’s not free either. The game has changed. And the rules were written by someone else. If you’re wondering whether your favorite exchange is still working in India, check the FIU-IND’s public registry of registered VDA SPs. If it’s not there, don’t use it. Not even with a VPN. The risks aren’t worth it. The future of crypto in India won’t be wild and open. It’ll be controlled, taxed, and monitored. Get used to it.

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• crypto exchanges India
• crypto restrictions India
• FIU-IND crypto
• Indian crypto regulations
• crypto tax India