If you are older than millennials, you might remember Ajit’s famous joke: “Liquid ise jeene nahi dega, aur oxygen ise marne nahi dega.” Well, that seems to be the state of crypto assets in India, because while consumer demand drives the markets, legal uncertainty still looms large.
Globally, cryptocurrency markets are mired in political flux and shifting policies. The urgency for a definitive regulatory framework to protect users has never been greater. In India, this need is underscored by three developments: the Ministry of Economic Affairs’ announcement of a discussion paper on cryptocurrency policy expected in September, the alarming $230 million hack of the WazirX exchange, and the growing volume of offshore cryptocurrency trading by Indians.
The government is looking to bolster user security in cryptocurrency markets. In January, India blocked nine offshore exchanges, a move that was widely seen as a positive. Indian user activity plummeted after the URLs were blocked, and several offshore exchanges eventually contacted the Financial Intelligence Unit to register locally. But a closer look at trading patterns reveals that the blocking measures aren’t enough to protect investors. According to a May 2024 report by the Eaya Center, peer-to-peer trading volume—the primary method by which Indian users deposit and withdraw INR on offshore exchanges—soared by more than 400% in April 2024, compared to the previous year.
Moreover, not all URLs have been blocked. For example, binance.com has been blocked, but p2p.binance.com and accounts.binance.com have not. Moreover, many offshore exchanges offer the ability to download their application files from mirror sources, and users can also use virtual private networks. And new platforms are emerging daily, such as NoOnes, an exclusive P2P exchange founded in 2023, which has already processed over $100 million in monthly transactions, with India playing a leading role. Cryptocurrency investors remain at the mercy of several unregulated offshore players.
