Crypto exchanges to avoid if you are Indian

It’s fascinating how regulatory frameworks can turn a technological innovation into a legal minefield. The real tragedy isn’t the hacks or the frozen funds-it’s that users are forced to become compliance officers just to protect their own assets. Crypto was supposed to liberate us from middlemen, but now we’re trapped in a system where the middleman is the government, and the rules are written in legalese no one actually understands.

Still, I admire the clarity of this post. It doesn’t yell. It doesn’t fearmonger. It just lays out the facts: if you’re in India, and you’re trading crypto, your first question shouldn’t be ‘what’s the fee?’-it should be ‘is this exchange registered with FIU-IND?’

From a regulatory compliance standpoint, the FIU-IND’s stance aligns with FATF Recommendation 16’s Travel Rule implementation. Non-compliant entities are essentially operating outside the AML/CFT ecosystem, which elevates counterparty risk to systemic levels. The absence of localized KYC/AML infrastructure renders off-chain transaction tracing unverifiable, thereby triggering correspondent banking de-risking protocols-hence the UPI/NEFT blocks.

What’s concerning is the lack of interoperability between exchange-reported data and the Income Tax Department’s e-filing portal. Without API-level integration, users are forced into manual reconciliation, which introduces operational risk and audit exposure. This isn’t regulation-it’s regulatory friction with punitive consequences.

This is one of the most balanced, well-researched pieces I’ve read on the Indian crypto landscape. It’s rare to see a post that doesn’t sensationalize or oversimplify. The distinction between ‘illegal to use’ and ‘illegal to operate’ is crucial-and often misunderstood. I appreciate how the author doesn’t just list risks but offers actionable verification steps. The FIU-IND registry check alone should be mandatory reading for every Indian crypto trader.

For those wondering about CoinSwitch or CoinDCX: yes, they’re safe. They’ve invested in compliance, not just marketing. That’s not an accident. It’s a strategy. And in a regulatory gray zone, strategy is survival.

Let me tell you something terrifying: the moment you deposit INR into Binance via a third-party gateway, you’re not just trusting an exchange-you’re trusting a chain of intermediaries who don’t exist legally in your country. Your money is now in a black box owned by a foreign corporation with zero accountability under Indian law. And if it vanishes? You’re not a victim. You’re a footnote in a Bloomberg article.

WazirX was the poster child of ‘Indian pride’ crypto. And now? It’s a ghost town with a website. The only thing more tragic than losing $230 million is watching people still depositing into it, hoping the ghosts will pay up. This isn’t crypto. This is a horror movie with real money.

I know this might sound overly cautious, but I’ve seen too many people get burned thinking ‘it’ll be fine.’ You don’t need to be a financial expert to protect yourself-you just need to be careful. If an exchange doesn’t have a physical office in India, doesn’t respond to local calls, and can’t give you a tax report? That’s not a red flag. That’s a full-blown emergency.

Stick with CoinDCX or ZebPay. They’re not glamorous. They don’t have TikTok ads. But they answer your emails. They file your taxes. And when things go wrong, they don’t disappear. That’s worth more than any low fee or high leverage.

Oh wow so now we’re supposed to be grateful that some Indian exchange has a ‘compliance team’ in Mumbai? Like that’s a victory? What’s next? A tea break with the RBI?

Meanwhile, the government is taxing crypto at 30% and 1% TDS but won’t let you use the platforms that actually work. So you’re paying more tax than most CEOs while being treated like a criminal for using your own money. This isn’t regulation. This is extortion with a spreadsheet.

And don’t even get me started on ‘FIU-IND registered’-that’s just a sticker on a coffin. WazirX was registered too. Until it wasn’t.

Simple truth: if you don’t have a local office, you’re not in India. You’re just a website. Stick to CoinDCX. Done.

ugh i just tried to deposit on bybit and it got reversed and now my bank sent me a ‘suspicious activity’ email like i’m laundering drug money??

why does this feel like being punished for using the internet??

also wazirx still says ‘we’re working on it’ like its 2024 and i’m still waiting for my 12k to come back. i think i’m gonna cry

why even bother with coinDCX? they charge like 1.5% fee and take 3 days to process withdrawals. binance has 0.1% and instant. who cares if they’re not registered? no one ever gets caught. the ed is busy chasing real criminals. not some guy buying btc for 50k

Let’s be real. The Indian government doesn’t want crypto to succeed. They want control. They want to tax it. They want to monitor it. But they don’t want to build the infrastructure to make it safe. So they create this weird limbo where you’re technically allowed to trade-but only if you’re willing to be a detective, a tax accountant, and a legal scholar all at once.

And the worst part? The ‘safe’ exchanges are boring. No memes. No leverage. No hype. Just spreadsheets and compliance forms. Who wants that?

I’ve been trading crypto since 2021 in India. I lost money on WazirX. I got frozen out of Bybit. I spent 6 months filing my own taxes with Excel. But I kept going-not because I’m brave, but because I believe in the tech.

Now I only use Unocoin. It’s slow. It’s quiet. But I know where my money is. And when I file my taxes, I don’t sweat. That’s peace of mind. And that’s worth more than any ‘low fee’.

I’m not an expert, but I’ve spent hours reading FIU-IND’s site and cross-checking exchanges. What shocked me most? Only five platforms are actually registered. Five. Out of dozens.

And yet, people still use Binance because it’s ‘the biggest’. That’s like choosing a hospital because it has the biggest sign-not because it has a licensed doctor.

If you’re reading this and you’re new to crypto in India: please, just check the registry. It takes 3 minutes. It could save you years.

It is worth noting that the Financial Intelligence Unit of India operates under the Prevention of Money Laundering Act, 2002. Entities that fail to register as reporting entities under Section 12 are in violation of statutory obligations, which may result in civil penalties, criminal liability for officers, and potential asset forfeiture under Section 8.

Therefore, the risk profile associated with non-compliant exchanges is not merely operational-it is juridical. Users are not merely exposed to financial loss; they are exposed to potential liability under Indian law, even absent intent to violate.

For this reason, the recommendation to use FIU-IND-registered platforms is not merely prudent-it is legally necessary.

As a Nigerian also navigating crypto in a regulatory minefield, I see the parallels. Our CBN banned banks from dealing with crypto, then turned around and taxed it. The world doesn’t make it easy for us to be pioneers.

But this post? It’s a lifeline. The clarity on FIU-IND registration, the emphasis on tax reporting, the call for physical presence-it’s the exact framework we need everywhere. You didn’t just list risks. You gave us a map. Thank you.

Just used CoinDCX for the first time today. Took 48 hours to deposit INR via UPI. Felt like waiting for a letter from the 1990s.

BUT-got my tax report in 2 clicks. No manual spreadsheets. No guesswork.

Worth it. 10/10. I’ll take slow and safe over fast and vanished any day. 🙌

FIU-IND? More like FBI-IND. This whole thing is a trap. The government wants your money, not your freedom. They let you trade so they can tax you. They let you lose money so they can say ‘see? crypto is risky!’ and justify banning it later.

WazirX was hacked? Yeah, because they were too busy kissing the government’s ass to invest in security. The real hack was the system. And we’re all just pawns in it.

Use Binance. Use Bybit. Use whatever. They’ll never catch you. They’re too busy chasing ghosts.

Been using ZebPay since 2020. Slow? Yeah. Boring? Definitely.

But I’ve never lost a rupee. I’ve never had a frozen account. I file my taxes with their report. Done.

Life’s too short to stress over crypto. Just pick one that doesn’t vanish. And chill. 🤙