When you open the CoinDCX or WazirX app today, you might not notice anything different. But behind the scenes, everything has changed. Since March 2023, India’s crypto exchanges have been forced to operate like banks - not just in how they handle money, but in how they protect it. And after two massive hacks, one costing $230 million, the government didn’t just ask for improvements. It demanded total overhaul.
Why India’s Crypto Rules Are Different Now
Before 2023, crypto exchanges in India operated in a gray zone. No one was officially in charge. But when the Financial Intelligence Unit of India (FIU-IND) stepped in, it applied the same rules used for banks and money transfer services. That meant every user had to pass strict KYC checks. Every transaction had to be logged. Every suspicious transfer had to be reported - no exceptions. The biggest shift? The FATF Travel Rule. Unlike most countries that only require sender-receiver details for transfers over $1,000, India applies it to every crypto transaction, no matter how small. If you send 0.001 BTC to a friend, CoinDCX or WazirX must record both your identity and theirs. This isn’t just paperwork. It’s a full digital trail.The Hacks That Changed Everything
WazirX’s $230 million breach in 2024 wasn’t just a loss of funds. It was a loss of trust. Users saw their assets vanish overnight. The platform took months to recover. Meanwhile, international exchanges like BingX fixed similar breaches in under 24 hours. That gap exposed a weakness: Indian exchanges weren’t built for this kind of threat. Then came CoinDCX’s breach in July 2025. Another major platform, another massive loss. The pattern was clear. These weren’t random attacks. They were systemic failures. Regulators didn’t blame hackers. They blamed poor security culture. In September 2025, FIU-IND responded with a new rule: every crypto exchange in India must pass a cybersecurity audit by a CERT-In-approved firm. No exceptions. No delays. No excuses.What the Cybersecurity Audit Actually Means
This isn’t a checklist. It’s a full forensic review. Auditors look at:- How cold wallets are stored and accessed
- Whether multi-signature systems are properly configured
- If employee access logs are monitored in real time
- How often penetration tests are run
- Whether incident response plans are tested quarterly
Offshore Exchanges Are Being Pushed Out
You might still be using Binance, Huobi, or BingX because they offer lower fees and more coins. But now, Indian authorities are sending notices to 25 offshore platforms. They have 45 days to register with FIU-IND or face a ban. Some have complied. Binance paid a $2.2 million penalty. KuCoin paid $41,000. Coinbase registered without issue. But others? Silence. And silence means blocked access. Indian users are caught in the middle. On one hand, offshore platforms give you access to 1,000+ tokens. On the other, if they get shut down tomorrow, your funds could disappear with no warning. Domestic exchanges are safer - but slower, pricier, and limited in coin selection.Who’s Winning and Who’s Losing
CoinDCX and WazirX are now the only two Indian exchanges with enough capital to survive the new rules. They’ve hired compliance teams, upgraded infrastructure, and partnered with cybersecurity firms like Pi42 and Mudrex to meet audit standards. Smaller players? Most are gone. Some tried to cut corners. One exchange skipped the audit and got fined ₹2.5 crore. Another tried to use a fake CERT-In certificate. It was shut down in a week. International firms are stepping in too. Singapore-based Liminal Custody now offers secure custody services to Indian institutions - fully compliant, fully legal. This isn’t just about trading. It’s about building infrastructure that lasts.
What This Means for You as a Trader
If you’re using CoinDCX or WazirX:- Your KYC is stricter - expect to re-verify every 6 months
- Withdrawals take longer - compliance checks add 1-2 hours
- Less altcoin variety - exchanges are dropping tokens they can’t fully trace
- Higher fees - compliance costs are passed to users
- Keep your funds low - don’t store large amounts
- Track the 45-day notices - if your platform gets flagged, move fast
- Don’t assume ‘no ban’ means ‘safe’ - many offshore platforms still don’t report transactions
The Bigger Picture: India’s Crypto Future
India isn’t trying to kill crypto. It’s trying to tame it. Finance Minister Nirmala Sitharaman said in 2022 that regulation shouldn’t stifle innovation. But after billions lost in hacks, the priority shifted: safety over speed. This model is becoming a blueprint for other emerging markets. Countries like Nigeria, Brazil, and Indonesia are watching closely. If India can make crypto safe without killing adoption, others will follow. The result? A smaller, stronger market. Fewer exchanges. More regulation. Fewer scams. Fewer hacks. Slower growth - but more stable growth. And for users? It means less freedom. But more protection.Are CoinDCX and WazirX safe to use now?
Yes - but only because they’ve spent millions upgrading security to meet FIU-IND’s new rules. Both exchanges now undergo mandatory cybersecurity audits by government-approved firms. Their cold storage, multi-signature systems, and transaction monitoring are now at banking standards. That doesn’t mean they’re 100% hack-proof, but they’re the safest options in India right now.
Can I still use Binance or Huobi in India?
Some can, some can’t. Binance and KuCoin registered after paying penalties. Others like Huobi and BingX are still under review. If you’re using an offshore platform, check if it’s on FIU-IND’s registered list. If it’s not, your funds could be frozen overnight. Don’t assume it’s safe just because you can still log in.
Why are Indian exchanges offering fewer coins than international ones?
Because of the FATF Travel Rule. Every coin must be fully traceable - meaning exchanges need to know who issued it, who owns it, and how it moves. Many low-cap or anonymous coins can’t meet that standard. So exchanges are dropping them. CoinDCX and WazirX now list only 150-200 coins, down from over 500. It’s not about limiting choice - it’s about legal compliance.
Do I need to pay more in fees now?
Yes. Compliance costs money. Audits, legal teams, KYC verification, transaction monitoring - all of it adds up. CoinDCX and WazirX have raised trading fees by 15-25% since 2024. Withdrawal fees are higher too. This isn’t greed - it’s survival. If they didn’t pass these costs on, they wouldn’t be able to afford the audits.
What happens if I don’t complete KYC on CoinDCX or WazirX?
Your account will be frozen. No deposits, no withdrawals, no trades. FIU-IND requires 100% KYC completion for all users. If you don’t submit your documents when requested, you lose access until you do. There’s no grace period. No exceptions.
Is India banning cryptocurrency?
No. India is not banning crypto. It’s regulating it. You can still buy, sell, and hold digital assets legally. The government even collects taxes on crypto gains. The goal isn’t to stop crypto - it’s to stop fraud, money laundering, and untraceable transactions. If you follow the rules, you’re perfectly legal.
Mark Ganim
January 29, 2026 AT 02:54So we’re trading crypto like it’s a bank account now? 🤔 The FATF Travel Rule applied to every transaction-even 0.001 BTC? That’s not regulation, that’s digital surveillance with a side of bureaucracy. They turned a decentralized dream into a ledger of shame. Where’s the freedom? Where’s the innovation? We traded one shadow economy for a government-monitored spreadsheet. And we call this progress?
Parth Makwana
January 30, 2026 AT 21:19The regulatory overhaul in India is nothing short of a watershed moment. FIU-IND’s mandate for CERT-In-approved audits, mandatory KYC re-verification, and full traceability under FATF Travel Rule is not just compliance-it’s institutional maturation. The $230M hack wasn’t a failure of technology; it was a failure of governance. CoinDCX and WazirX are now India’s crypto bedrock-rigorous, audited, and resilient. This isn’t restriction; it’s evolution.
Elle M
February 1, 2026 AT 18:44Oh wow. India finally got its act together. While the rest of the world lets crypto anarchists run wild with Monero and privacy coins, India says: ‘Nope. You want to trade? You show ID. Every. Single. Time.’ Honestly? I’m impressed. If you can’t handle KYC, maybe you shouldn’t be holding crypto. Welcome to the real world, anarchists.
Crystal Underwood
February 1, 2026 AT 23:15They didn’t fix security-they just made it expensive. You think these audits are about safety? Nah. They’re about control. And guess who’s getting squeezed? The little guys. The startups. The innovators. Meanwhile, CoinDCX and WazirX are now the only two players left because they had VC cash to burn. This isn’t regulation-it’s a cartel being built with government stamps. And you’re all cheering? 😒
Jack Petty
February 3, 2026 AT 06:09So the hacks happened because they were lazy? Or because the government forced them to store keys in the same building as their HR department? 🤔 Also-why does every ‘cybersecurity audit’ sound like a PowerPoint slide from a 2012 IT consultant? Real security isn’t checked off a list. It’s a culture. And no audit can fix that.