Overview
- Chainalysis data for July 2025–June 2026 shows India received $88.4 billion through centralized exchanges while its overall crypto economy fell 14.7% to $135 billion.
- Domestic Indian exchanges processed only about 0.7% of local exchange volume, a collapse from earlier levels that analysts link to users moving to offshore platforms that do not collect the 1% TDS.
- Indian tax rules that levy a 30% gain tax and the 1% tax deducted at source are cited by industry leaders as a key reason traders use offshore CEXs that may not apply the TDS.
- Regulators have stepped up enforcement: the Financial Intelligence Unit sought large over‑the‑counter trade records in June and in September issued non‑compliance notices to 15 offshore platforms, naming services such as Weex, Blofin, WOO X and WhiteBIT.
- New compliance rules require virtual asset providers serving Indian customers to register with FIU IND, run stronger KYC checks including live selfie and geolocation, keep records for five years, and face expanded international tax reporting that covers specified crypto assets.