As countries worldwide, including the United States under its incoming president Donald Trump, prepare to tighten crypto regulations, India risks being left behind if it does not take proactive steps. CoinDCX Co-founder and CEO Sumit Gupta has stressed the importance of addressing regulatory gaps to unlock innovation, retain talent, and capitalize on the economic value of cryptocurrency transactions.
In an interview, Gupta shared his concerns about the adverse effects of India’s existing crypto tax regime. “It has been roughly three years since higher taxes were imposed on crypto transactions. There was no mention of crypto in the last Budget. But I hope crypto finds some mention in this Budget, and some relaxation is granted on crypto taxation,” he said.
Gupta highlighted the severe impact of India’s tax policies on the domestic crypto market. “After the implementation of 1 per cent TDS, higher taxation, and no loss offsetting, Indian customers do not see economic sense in trading on domestic exchanges. Over 90 per cent of the volume has shifted offshore, which is roughly around ₹6 lakh crore.”
He warned of the long-term consequences of such policies, emphasizing that tax revenues had decreased and innovation was stifled. “The unintended consequences of higher tax were very harmful for the country. First, the tax revenue has gone. Efforts must be taken to steer the industry towards a regulatory-compliant direction to keep bad actors out of the ecosystem,” Gupta added.
Regulatory Urgency Amid Global Developments
Gupta underscored the need for India to act swiftly as other jurisdictions, including the United States, move forward with proactive measures. “The incoming US President Donald Trump will likely pass various administrative orders related to crypto. By 2026, it will be very late for India as many countries would have progressed on this front. It is happening very fast; in 2025, I see not just the US but many other countries also making positive moves.”
Gupta urged the Indian government to revise its tax policies to prevent losing out on opportunities to foster innovation and economic growth.
WazirX Acquisition: A Commitment to User Confidence
Gupta also addressed CoinDCX’s offer to acquire the troubled crypto exchange WazirX, noting that external factors, including court proceedings, had delayed the process. “Presently, there is not enough concrete information for me to comment. All I know is that Indian customers have been impacted due to the security breach, and that directly affects user sentiment. We remain open to the idea of helping impacted customers.”
He emphasized CoinDCX’s commitment to safeguarding user confidence. “We are ready to put money out of our pocket to compensate for losses where possible. While we may not cover 100 per cent of the losses, having built a large platform, we can benefit users directly and indirectly.”
Ensuring Security Amid Rising Risks
On the issue of cybersecurity, Gupta acknowledged that no platform could guarantee absolute safety. “Even if you look at Coinbase and Binance, they have also gone through security breaches. What matters is how you react. You should be able to absorb losses via your own reserves or by raising funds, but customers must not be impacted.”
Gupta explained CoinDCX’s approach to protecting users, which includes holding funds in insured wallets and establishing a crypto investor protection fund to provide an added layer of security.
Optimism for Regulatory Changes in 2025
Gupta expressed optimism about India’s regulatory future, praising the new Reserve Bank of India (RBI) Governor for being more receptive to technological innovation. “I am happy to know that the new RBI Governor is appreciative of newer technology and innovation. The perspective of RBI towards using crypto as technology is improving and hopefully will continue.”
As the global crypto landscape evolves, Gupta’s message is clear: India must embrace proactive regulation to ensure its participation in the growing digital economy. Failure to act now could mean missing out on a transformative opportunity for the nation’s technological and economic future.