India flags $465M in crypto-linked offenses while calling for coordinated global regulation

India's finance ministry has once again emphasized the need for coordinated global regulations on digital assets. This push comes as authorities have uncovered over ₹4,190 crore (approximately $465 million) in crypto-linked crimes in recent years.

Indian Finance Minister Nirmala Sitharaman stated that the country cannot effectively police an industry that is "inherently borderless." This declaration occurs as the global crypto market is experiencing a recovery, following a period of significant selling pressure. Bitcoin has seen a gain of around 7% in the last seven days, though it remains down by more than 10% over the past 30 days.

India Identifies Substantial Unreported Crypto Income

During a session in the Lok Sabha, Sitharaman highlighted that any regulatory framework for crypto assets can only be effective with international collaboration, aligning with the government's long-standing position on these assets.

India views crypto assets differently, not recognizing cryptocurrencies as legal tender. However, it permits their purchase, sale, and holding as Virtual Digital Assets (VDAs) under a stringent tax regime. Gains are subject to a flat 30% tax plus cess, and a 1% Tax Deducted at Source (TDS) applies to most transactions. These regulations have, in turn, prompted trading activities to move offshore.

Sitharaman also revealed that tax officials had identified ₹888.82 crore (approximately $99 million) in unreported cryptocurrency income through search and seizure operations. The Enforcement Directorate has attached or seized ₹4,189.89 crore (approximately $466 million) under the Prevention of Money Laundering Act (PMLA). Authorities have also made 29 arrests and filed 22 prosecution complaints.

The government's data-driven NUDGE campaign has also brought to light compliance gaps. Over 44,000 notices were issued to taxpayers who traded or invested in VDAs but failed to declare them in the designated tax schedule.

Coinbase Resumes Operations in India

Officials have indicated that the current regulatory vacuum is becoming a concern for financial stability. The Reserve Bank of India (RBI) has consistently warned that cryptocurrencies cannot be "effectively regulated" without international safeguards.

This renewed focus on regulation coincides with signs of recovery in India's crypto market, despite the heavy taxation. The global cryptocurrency market capitalization saw a 2.5% increase in the last 24 hours. Bitcoin's price traded above $92,000 before dipping back into the $91,500 zone. Meanwhile, the Fear and Greed index continues to indicate "Fear" among investors.

Adding to the market momentum, Coinbase reopened registrations in India this week. The cryptocurrency exchange had previously ceased operations in 2023 due to issues with UPI integration. It is now enabling crypto-to-crypto trades and plans to reinstate fiat on-ramps in 2026, pending approval from the Financial Intelligence Unit.