Big Names That Indian Traders Should Treat With Caution

Even the world’s biggest platforms have run afoul of Indian rules. Below are the three that repeatedly appear in FIU‑IND penalty notices.

Binance, the global crypto exchange with the largest daily volume

The FIU‑IND slapped Binance with multi‑million‑dollar penalties in 2024 for failing to share user KYC data and for allowing anonymous INR deposits. The fines forced Binance to suspend direct INR onboarding for Indian users, pushing many to third‑party services that lack any regulatory oversight.

Bybit, an international derivatives exchange popular among Indian day traders

Bybit faced a similar penalty in early 2025. The regulator cited inadequate AML monitoring and a refusal to cooperate with Indian tax authorities. As a result, Bybit’s Indian banking partners withdrew support, leaving users with delayed fiat withdrawals and frozen accounts.

WazirX, India’s home‑grown exchange with over 6million users

WazirX’s July2024 security breach exposed a multi‑signature wallet, causing a $230million loss. The exchange has since announced a restructuring plan, but critics note that user funds remain locked on the platform rather than being returned. WazirX also carries indirect ties to the Binance group, which raises additional compliance questions.

Risk Profile of Non‑Compliant Exchanges

How to Verify FIU‑IND Compliance Before You Deposit

Because the regulator doesn’t publish an official list, use these practical checks:

1. Visit the FIU‑IND website and search for the exchange’s name in recent enforcement notices.
2. Confirm that the platform has a partnership with an Indian bank or a licensed payment gateway (e.g., Razorpay, PayU).
3. Ask for the exchange’s KYC/AML policy and verify that it includes mandatory RBI‑approved identity verification.
4. Check if the exchange provides a downloadable tax‑summary report that aligns with the 30% capital‑gains rate and 1% TDS.
5. Look for third‑party security audits (certified by firms like Trail of Bits or Quantstamp) and a public bug‑bounty program.

If any of these items are missing, treat the platform as high risk.

Safer Alternatives for Indian Users

While no exchange is completely immune to future regulation, the following platforms consistently demonstrate better compliance and security practices:

• CoinDCX, a domestic exchange with over 3million active users and regular FIU‑IND reporting
• CoinSwitch, aggregates liquidity across multiple vetted exchanges, offering a single‑click INR on‑ramp
• ZebPay, one of the oldest Indian exchanges, known for its strict KYC and integrated tax‑reporting module
• Unocoin, focuses on simple fiat‑crypto buying with RBI‑approved banking partners
• Bitbns, offers a wide range of altcoins while maintaining compliance with Indian tax rules

Even with these options, stay vigilant. Regulatory guidance can shift, and today’s compliant exchange could face penalties tomorrow.

Keeping Up with the Evolving Regulatory Landscape

The Reserve Bank of India (RBI, India’s central bank, which enforces banking prohibitions on crypto‑related transactions) continues to issue circulars that affect how fiat can move in and out of exchanges. Meanwhile, the Ministry of Finance tightens reporting requirements each fiscal year. As a result, Indian traders should make it a habit to:

• Subscribe to FIU‑IND’s monthly compliance newsletter.
• Follow reputable crypto‑law blogs that summarize RBI circulars.
• Periodically re‑audit the exchanges you use for any new penalty notices.

Being proactive reduces the chance of finding your account frozen during a tax filing season.

Checklist: What Every Indian Crypto Trader Should Do Before Using an Exchange

1. Verify FIU‑IND compliance status.
2. Confirm INR banking or payment‑gateway partnerships.
3. Ensure the platform provides a detailed tax‑summary report.
4. Check for recent third‑party security audits and bug‑bounty programs.
5. Read user reviews for grievance handling speed.
6. Keep a backup of private keys or use hardware wallets for long‑term holdings.
7. Monitor regulatory news at least once a month.

Following this list can save you from losing money, wasting time on frozen accounts, or getting tangled with the Enforcement Directorate.