News Post

Indian crypto exchanges’ futures trade with foreign peers may test FEMA limits

Economic Times · 11d

Indian crypto exchanges are reportedly tapping offshore exchanges for cryptocurrency futures trade, while high-net-worth individuals (HNIs) may be making misleading declarations to banks to show their foreign crypto holdings as "security" investments. Local exchanges and HNIs believe their trades are legal as they are dealing with foreign exchanges registered with the Financial Intelligence Unit. However, they may be breaching rules under the Foreign Exchange Management Act (FEMA). Exchanges in India are using USDT as a margin for futures trades and are striking back-to-back deals with overseas exchanges. There are concerns over the regulatory and tax compliance of these transactions.