Crypto Risks in India: What You Need to Know Before Investing

When you hold crypto risks in India, the combination of legal ambiguity, lack of consumer protection, and aggressive regulatory enforcement that makes owning digital assets dangerous for everyday users. Also known as Indian crypto dangers, these risks aren’t theoretical—they’ve cost people their life savings. Unlike in countries where crypto is taxed but allowed, India treats ownership like a gray-area hobby, not a right.

There’s no law that says you can’t hold Bitcoin or Ethereum in India, but there’s also no law that says the government will protect you if something goes wrong. If an exchange gets hacked, like Altsbit, a crypto exchange that collapsed after a 2020 hack stole nearly all user funds, Indian courts won’t step in to recover your coins. If you’re scammed by a fake airdrop like SWAPP Protocol, a non-existent project with dozens of phishing sites pretending to give away free tokens, you have zero legal recourse. Even if you’re just trading on a small platform like Libre crypto exchange, a low-fee Bitcoin trading site with no audits or customer support, you’re on your own.

The real danger isn’t just scams—it’s the rules changing overnight. The Reserve Bank of India has blocked banks from serving crypto businesses. Tax authorities demand detailed reports on every trade, even if you didn’t cash out. And while the government talks about a digital rupee, it’s clear they don’t want you using anything else. You can own crypto, but you can’t trust the system behind it. That’s why people who bought Bitcoin in 2021 are now stuck—can’t sell without triggering taxes, can’t move it without risking a hack, and can’t get help when things break.

What you’ll find below isn’t a list of opinions. It’s a collection of real cases: failed exchanges, dead tokens, fake airdrops, and regulatory traps that have already hurt Indian crypto users. You’ll see how Chinese crypto laws, a parallel case where ownership is tolerated but trading is banned mirror India’s situation. You’ll learn why Coinbase restrictions, the U.S. platform’s country-by-country access limits keep Indian users locked out. And you’ll understand why projects like Shib Original Vision, a memecoin with zero trading volume and no development thrive here—not because they’re good, but because people are desperate for something that feels like a chance.