Cryptocurrencies are digital assets built on blockchain technology — a decentralised online ledger that records transactions securely and transparently. Unlike traditional currencies, cryptos such as Bitcoin and Ethereum are not regulated by any government. Their value depends on supply, demand and market sentiment, often making them highly volatile.Crypto exchanges are online platforms that allow users to buy, sell and trade cryptocurrencies. They function somewhat like stock trading platforms but deal exclusively in digital tokens, or units that are digitally represented. Popular global exchanges include Binance and Coinbase. There are some prominent Indian exchanges as well, such as CoinSwitch, Zebpay and WazirX. These exchanges convert rupees into cryptocurrencies and store them in digital wallets.Express Investigation Part 1 | After tax havens, dirty money finds a new home: CryptocurrencyWhile trading in cryptocurrencies is not illegal in India, they are not recognised as legal tender, and their use is largely restricted to investment instruments. Why crypto cases are a minefieldHow do crypto scams happen?Most crypto scams lure investors with promises of quick, guaranteed profits from new coins or trading platforms. Fraudsters often create fake websites or social media accounts that look like legitimate crypto exchanges or wallet services. Once users transfer their money or digital tokens, the scammers disappear.Another common trick involves “pump and dump” schemes, where groups artificially inflate a coin’s price and then sell off their holdings, leaving others with losses. Phishing attacks — where users are tricked into revealing private wallet keys or passwords — are also widespread.What is the size of India’s crypto market?It is one of the largest markets globally, with an estimated 119 million users. Its market size was valued at $2.6 billion in 2024, according to a report by consulting firm IMARC Group. Another report, by investment advisory firm HDFCTru, estimated that the market size will reach $15 billion by 2035 — exhibiting a Compound Annual Growth Rate (CAGR) of over 17 per cent between 2024 and 2035.Express Investigation Part 2 | New crypto adds many blindfolds to old hawalaAccording to a report released by Indian crypto exchange CoinSwitch, Gen Z (18–25) topped India’s crypto investor base for the first time with 37.6%, narrowly surpassing Millennials (26–35) at 37.3% and (36-45) at 17.8% in the third quarter of 2025. The study, drawing insights from 2.5 crore of the platform’s users, also showed that while metro cities dominate, led by Delhi (19.3%), Bengaluru (8.9%), and Mumbai (7%), cities like Jaipur, Lucknow and Patna are emerging as new centres of adoption.Story continues below this adHow does it compare with, say, the mutual funds sector?Investing in cryptocurrencies is fundamentally different from putting money in mutual funds. Mutual funds pool investors’ money to buy regulated financial assets like stocks and bonds, managed by professional fund managers and overseen by the Securities and Exchange Board of India (SEBI). Crypto investments are unregulated, lack government-backed investor protection, and are prone to extreme price swings.While cryptocurrencies are gaining traction in India, investments in the sector are a smidge compared to the mutual funds market. Assets under management of India’s equity-oriented mutual funds, as on October 31, stood at over $390 billion, according to data with the Association of Mutual Funds in India.Is there a central law for the sector?There is also no central law that regulates the sector, which brings policy uncertainty for the industry and poor safety guardrails for users. Unlike money in banks, a part of which is insured by the Reserve Bank of India (RBI), crypto investments are not insured.Express Investigation Part 3 | Agencies track trail: India to China via Dubai and CambodiaIn 2018, the RBI banned banks from offering services to cryptocurrency exchanges and traders, a direction that was overturned by the Supreme Court in 2020, reopening the doors for crypto trading in India. In 2022, the Government introduced a flat 30% tax on all income from virtual digital assets, and a 1% Tax Deducted at Source (TDS) on every crypto transaction, hoping that the high tax rates might deter retail investors.Story continues below this adWhy is the RBI against crypto assets?The RBI views them as a threat to financial stability and monetary control. It argues that crypto assets are highly speculative and can expose investors to large losses. It fears that widespread use of private digital currencies could undermine the rupee’s sovereignty and enable money laundering or terror financing.Citing an International Monetary Fund report, the RBI in its Financial Stability Report released last December said widespread use of crypto assets could reduce the effectiveness of monetary policy, worsen fiscal risks, circumvent capital flow management measures and divert resources for financing the real economy.What is the world doing?According to a report from investment fund a16z, the total crypto market cap crossed the $4 trillion threshold for the first time in 2025. And, major global jurisdictions are already shaping their regulatory maps to keep up with this rapid growth.In the European Securities and Markets Authority’s region, the Markets in Crypto-Assets Regulation (MiCA) offers a unified crypto-asset legal framework. In the US, multiple agencies such as the Securities and Exchange Commission, the Commodity Futures Trading Commission and the Financial Crimes Enforcement Network are advancing oversight of digital assets. Earlier this year, the US unveiled the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act, which focuses on regulating stablecoins, a type of cryptocurrency that is pegged to predictable assets like the US dollar, allowing even big tech companies to issue them.Express Investigation Part 4 | Regulatory haze: Bank services, govt taxes, but no governing lawConversely, some nations like China maintain a near-total ban on trading and mining.Story continues below this adShould you invest in cryptos?Cryptos are unregulated in India, and hence a risky instrument. Experts advise thorough research and investments through regulated and reputed exchanges that follow strict KYC and AML (Anti-Money Laundering) norms. For dealing in cryptos, use strong passwords, two-factor authentication, and cold wallets (offline storage) to deter hackers. Avoid sharing private keys or seed phrases with anyone.It’s also important to be cautious of “get-rich-quick” schemes and unknown tokens that promise high returns — many turn out to be scams. Diversifying your portfolio and seeking advice from financial professionals can further reduce risks.