Indian Crypto Platforms Thrive Amid Regulatory Grey Zone and Lower Taxes
Zerodha CEO Nithin Kamath highlights how Indian crypto platforms are thriving in a regulatory grey zone with lower taxes and high leverage in F&O.
Crypto F&O Gains Unexpected Popularity
Indian crypto platforms are gaining strong traction, fueled by a regulatory grey zone, lower taxes, and extreme leverage in futures and options (F&O) trading. Zerodha founder and CEO Nithin Kamath highlighted this trend in a tweet on Tuesday, expressing surprise at the rapid rise of crypto derivatives in India.
Nithin Kamath on India’s Crypto Surge
“I hadn’t realised how popular crypto F&O has become,” Kamath noted, while pointing to a report. He emphasized that Indian crypto platforms continue to thrive despite unclear regulatory oversight. The combination of relatively lower tax burdens and the availability of high leverage in derivatives trading has further boosted their growth.
Regulatory Grey Zone Creates Mixed Signals
Crypto remains in a regulatory grey zone in India, with no clear policy framework governing trading platforms. Despite repeated discussions around legislation and taxation clarity, the industry continues to operate in a space that allows significant flexibility. This lack of strict oversight, coupled with India’s growing appetite for speculative assets, has helped these platforms capture a large user base.
Lower Taxes and Leverage Drive Growth
Another factor contributing to the expansion of Indian crypto platforms is taxation. Compared to traditional markets, crypto traders often find lower tax implications, which incentivizes participation. At the same time, extreme leverage in futures and options trading attracts high-risk investors looking for outsized returns. Together, these elements have made Indian crypto platforms a powerful force in the digital asset landscape.
The Future of Indian Crypto Platforms
However, analysts caution that this boom carries risks. The combination of regulatory uncertainty, high leverage, and speculative trading could expose investors to sharp volatility. Going forward, experts believe the government’s approach toward crypto regulation will play a critical role in shaping the sustainability of this growth.
