New Delhi, August 2025 – As India’s virtual digital assets (VDA) sector faces growing concerns over investor protection, regulatory ambiguity, and cross-border legal hurdles, a recent edition of IndiaTech Dialogues reignited public discourse on the urgent need for reform.
Held at the India Habitat Centre, the session titled “Virtual Digital Assets: Regulations, Responsibility, and the Road Ahead” brought together legal experts, investors, and digital finance professionals. The conversation focused on how Indian investors are increasingly left without adequate legal protections, particularly in light of the ongoing WazirX case.
WazirX, a crypto exchange operating primarily in India, is owned by Zettai Pte Ltd, a Singapore-registered company. Legal proceedings involving the exchange, including restructuring and moratoriums, are being conducted in Singapore courts. This has effectively excluded Indian investors from seeking recourse under Indian law, prompting frustration and concern from affected users.
Investor anxieties intensified following a 2024 cyberattack on WazirX, which led to renewed calls for a National Company Law Tribunal (NCLT)-led dissolution process. Such a move, panelists argued, could provide a structured, domestic legal remedy to safeguard stakeholder interests.
“The current investor situation exposes serious regulatory and jurisdictional challenges,” said Sanjay Saxena, Digital Payments and Web3 Expert. “Seeking resolution through the NCLT is both appropriate and necessary.”
Rameesh Kailasam, CEO and President of IndiaTech.org, stressed that while digital assets are borderless, investor rights should not be. He called for regulatory clarity to deal with scenarios like hacks, bankruptcies, and insolvencies.
“India needs to enforce a mechanism to handle such crises in the larger interest of investor protection,” he noted.
Technology lawyer and VDA investor Chirayu Bagree underscored the urgency of creating a dedicated, crypto-specific regulatory body in India. He warned that the current vacuum leaves both exchanges and investors exposed to legal and financial uncertainty.
“Regulatory clarity must go hand in hand with legal recourse and timely redressal,” he said. “We need continuous dialogue between policymakers and stakeholders to shape a framework that works for India.”
Beyond legal concerns, the dialogue also addressed a deeper question: What exactly are virtual digital assets, and how is crypto defined?
At its core, a VDA refers to any digital asset built using distributed ledger technology like blockchain. Crypto, in this context, is essentially programmable code that may exist on public or private blockchains. Public blockchains emphasize decentralization, while private ones are centrally managed, which affects how they are regulated.
The conversation underscores the growing importance of crypto in the global financial system and the urgency for India to act. Crypto offers transparency, decentralization, and freedom through blockchain technology. It is being widely adopted by governments and corporations worldwide, including the U.S., China, and Middle Eastern countries, all of whom are building crypto reserves and enabling mining and cross-border settlements.
While India remains cautious, it has acknowledged crypto through taxation and compliance requirements like FIU registration and anti-money laundering provisions. However, full regulatory legitimacy is still lacking. This regulatory ambiguity creates risks for Indian investors, especially when domestic exchanges register abroad to escape oversight, leaving users unprotected in case of fraud or collapse.
Despite this, Indian developers are actively building world-class blockchain solutions like Polygon, and India is technically well-prepared to launch a stablecoin. The real issue lies in the absence of a formal regulatory framework, despite comprehensive policy recommendations already being made by bodies like IndiaTech. The government has the blueprint but has yet to move decisively, leaving investors exposed and innovation stifled.
India is ready in terms of talent, infrastructure, and policy inputs — the missing piece is regulation that provides clarity, accountability, and investor protection.
Much of the confusion in India, stems from a lack of understanding among regulators. Many fail to distinguish between trading platforms and the digital assets themselves. While crypto originally aimed to operate outside centralized systems, it has increasingly become integrated with mainstream finance, evident in the rise of crypto ETFs and institutional investments.
Despite the complexity, most Indian investors view crypto primarily as a high-risk, high-reward asset. This perception often overlooks the broader technological potential and utility behind blockchain-based projects. Panelists stressed that both investor and regulator education is urgently needed to support a more mature, resilient digital asset economy.
In conclusion, the IndiaTech Dialogues made clear that India’s crypto ecosystem is at a crossroads. Without immediate reforms, including regulatory clarity, investor protection mechanisms, and education, the country risks falling behind in shaping a secure and inclusive digital asset future.
