- India records ₹31,500 crore crypto fraud losses in cybercrime surge.
- Panel calls for licensing crypto exchanges under global FATF norms.
- Stablecoins allowed only with RBI approval under strict regulation.
India’s Parliamentary Standing Committee on Home Affairs has recommended strict regulation of cryptocurrencies under a clear legal framework. According to its 254th report on cybercrime, the panel suggested that crypto should be recognized as “digital assets” under the Foreign Exchange Management Act to ensure government oversight through anti-money laundering and know-your-customer rules.
The report revealed that cryptocurrencies have been misused in a wide range of crimes. Cases included cryptojacking, ransomware payments, fraudulent trading applications, and dark web transactions involving drugs, weapons, and child exploitation. Investigators also reported laundering operations using mule accounts, layered wallets, and shell companies.
Between 2019 and 2024, more than 5.3 million cybercrime complaints were filed, with financial fraud forming the majority. Losses from these crimes crossed ₹31,500 crore, and many were linked to crypto-related fraud. The committee emphasized the urgent need for regulatory clarity to separate genuine adoption from criminal exploitation.
Call for Licensing and Taxation Framework
Despite its alarming findings, the panel opposed a blanket ban, calling it ineffective. Instead, it offered licensing of exchanges to international standards established by the Financial Action Task Force. It also emphasized that the taxation rules should be clarified since the existing 30 percent tax and 1 percent TDS are implemented without a legal framework.
The committee also discussed the place of stablecoins, which should only be introduced by the Reserve Bank of India in INR-pegged versions. It said these assets should be subjected to strict control to avoid misuse.
Some companies have not stopped experimenting with crypto-related approaches despite the lack of regulatory clarity. The committee pointed out this trend as one reason appropriate rules should be put in place to provide accountability and safeguard investors.
The committee’s recommendations suggest a trend toward regulation rather than prohibition. By advocating strict licensing, taxation, and central bank oversight, the panel signaled a pragmatic path to tackle crypto-driven fraud while enabling controlled industry growth.
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