Cryptocurrency is no longer an abstract futuristic notion and is embedded within India’s expanding financial landscape. Many Indian people are purchasing digital assets (including Bitcoin, Ethereum and other cryptocurrencies or altcoins) despite uncertainty in the regulatory space. Many also have fallen victim to scams and frauds because of this increase.
If you have suffered such a loss, or believe that you may be being scammed with crypto, knowing how to report heinous and fraudulent online activity within the cryptocurrency arena in India is important. This wrapped and packaged piece of writing will provide you with all of the complaint procedures, legal provisions, government institutions or support, and specific case laws, to ensure that you can make a timely complaint.
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What is Cryptocurrency?
Cryptocurrency is an example of a digital or virtual currency using cryptography for security, and the currency is independent of a central bank or government organization. Cryptocurrencies are different from traditional currencies like the EUR, INR, USD, in that they are decentralized and principally peer-to-peer, allowing users to send and receive money with no intermediaries such as banks.
What is a Cryptocurrency Fraud in India?
Most crypto frauds commonly present victims the following:
- Guaranteed returns (10-15% monthly);
- Completely fraudulent or fake trading platform or wallets;
- Phishing link to steal as well as capture the private keys;
- New token launches where no team behind the project (i.e. rug pull);
- Telegram or Discord groups that will pump and dump their scheme
Pro tip: If someone guarantees a profit, run.
Is Crypto Legal in India or Not?
Here’s the legal landscape as of 2025:
- Not banned but not legal tender
- 30% tax on crypto profits under the Finance Act, 2022
- Exchanges must be registered with FIU-IND
- Central Banks like RBI and regulators like SEBI have publicly warned traders/investors against unregulated and unlicensed platforms.
So yes, you can trade in crypto, but if you are defrauded you will have to avail yourself to existing criminal and cyber laws for civil recourse.
What Laws Protect You from Crypto Fraud in India?
Clients were helped to file FIRs and legal actions under these key laws:
| Law | Section | Use Case |
| Indian Penal Code, 1860/Bhartiya Nyaya Sanhita, 2023 | 420/318 (4) (cheating)/, 406/316 (2) (breach of trust), 120B/61 (2) | For misrepresentation or fund siphoning |
| Information Technology Act, 2000 | 66C, 66D, 65 | For identity theft and online deception |
| Prevention of Money Laundering Act, 2002 | Section 3 | If fraud involves laundering or cross-border wallets |
| Banning of Unregulated Deposit Schemes Act, 2019 | Multiple sections | For Ponzi or multi-level crypto schemes |
| Consumer Protection Act, 2019 | Misrepresentation clauses | Against platforms posing as legitimate services |
Faced a Crypto Scam? Here’s What to Do Immediately
We always advise victims to act within 48 hours. Here’s the exact sequence:
Step 1: Save Every Piece of Evidence
Clients who succeeded in recovering funds had these ready:
- Wallet addresses and transaction IDs
- Screenshots of chats or fake websites
- Payment receipts or emails
- Screenshots of Telegram or WhatsApp groups
Step 2: Report to the Cyber Cell First
You can do this:
- Online: www.cybercrime.gov.in
- Offline: Visit the local Cyber Crime Police Station
Case Tip: One of our Delhi clients filed online and submitted the hard copy physically, leading to faster FIR registration.
Step 3: File an FIR Under Relevant Sections
If cybercrime police can’t act fast, go to your local police station and file an FIR. If they refuse, use Section 156(3) CrPC/Section 175 BNSS and file before a Magistrate.
Step 4: Notify the Exchange or Platform
If it was on a known platform that you were scammed, notify them as soon as possible:
- WazirX, CoinDCX, Binance, Coinbase, all have complaint forms
- Request wallet freezing or KYC lookup
Real Case: A Pune-based client got Binance to freeze ₹3.2 lakh in a wallet before the scammer could withdraw it.
Step 5: File Complaint with RBI or SEBI (If Money Moved Through Banks)
- RBI Sachet: www.sachet.rbi.org.in
- SEBI SCORES: www.scores.gov.in
Can Indian Authorities Really Act on Crypto Fraud?
Yes. Here’s how enforcement bodies crack down:
| Agency | How They Help |
| Cyber Cell | Tracks wallet activity via tools like Etherscan, BTC.com |
| Enforcement Directorate (ED) | Freezes assets, tracks laundering via PMLA |
| Income Tax Department | Probes for unreported gains |
| CERT-In and Interpol | Help with cross-border tracing |
What If the Fraudster Is Outside India?
There was a case where the scammer operated from the UAE using Telegram. Here’s what to do:
- Filed FIR and cybercrime complaint in India
- Used CERT-In to trace hosting provider
- Filed request under MLAT for data sharing
- Binance assisted after receiving Indian police’s formal request
Even international crypto frauds can be pursued, but time is critical.
How to Avoid Falling for a Crypto Fraud?
From dozens of real cases, here’s what we’ve learned:
- Use FIU-registered exchanges only
- Avoid high-return Telegram groups or investment promises
- Always check project whitepapers and team credibility
- Enable 2FA on all wallets and exchanges
- Store large holdings in hardware wallets
- Never share private keys or seed phrases, not even with “support” agents
Landmark Crypto Fraud Cases in India
- GainBitcoin Scam: Amit Bhardwaj lured investors with 10% monthly returns. Booked under IPC and IT Act. Supreme Court clubbed all cases; ED and CBI led investigation.
- Morris Coin Scam: A Kerala company sold a fake token. ED seized ₹36 crore assets. Kerala High Court backed PMLA enforcement.
- Telangana v. Abdul Gaffar (2022): Crypto moved abroad from Indian investors. IPC and IT Act used. High Court upheld seizure of wallets under PMLA.
What Is the Government Doing to Stop Crypto Frauds?
- FIU-IND mandates suspicious activity reporting from exchanges
- Income Tax raids on unregistered platforms and influencers
- The forthcoming Digital India Bill is anticipated to govern the security of digital assets.
- India aligns with FATF standards for global crypto oversight
Conclusion
Crypto scams may feel overwhelming, especially if you’re not tech-savvy. But the law is on your side.
At Lead India, we’ve helped several victims recover funds and file successful complaints. With the right documentation and timely legal support, justice is possible. Stay informed. Act fast. And the moment you sense fraud, report it.
One can talk to lawyer from Lead India for any kind of legal support. In India, free legal advice online can be obtained at Lead India. Along with receiving free legal advice online, one can also ask questions to the experts online free through Lead India.
FAQs
1. Is cryptocurrency legal in India in 2025?
Cryptocurrency is not banned but is not considered legal tender. It is taxable under the Finance Act, 2022, and regulated through guidelines from the RBI and SEBI.
2. Can Indian authorities take action if the scammer is based abroad?
Yes. Through Interpol, CERT-In, and MLATs, Indian authorities can initiate cross-border investigation and cooperation. Many global exchanges have taken action based on these reports in the past.
3. What are typical indicators of a cryptocurrency scam?
Common warning signs include claimed guarantees of returns, unverified tokens, fake exchanges, unsolicited investment groups on Telegram/WhatsApp, and rushed investment.
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