(VDA) platforms that operate outside Indian regulations.”The Reserve Bank of India (RBI) has cautioned the public against dealing in forex with unauthorised entities and trading platforms under FEMA, 1999, through advisories and awareness campaigns,” Minister of State for Finance Pankaj Chaudhary informed the Lok Sabha.
In the past three years, only 17 complaints have been received by the RBI regarding financial losses suffered by Indian residents due to such platforms — two in 2022, eight in 2023, and seven in 2024.Separately, the Directorate of Enforcement (ED) received six complaints over the last three financial years, with cases being investigated under Foreign Exchange Management Act (FEMA) and Prevention of Money Laundering Act (PMLA).
Govt’s crackdown on illegal platforms
The RBI has published an ‘Alert List’ of unauthorised forex trading platforms on its website, including names of entities falsely advertising trading and training services.
Also read: 1,800 fake websites, 167,000 counterfeit KYC documents: Inside India’s massive identity fraud network
Additionally, the RBI has instructed regulated financial entities to conduct strict Know Your Customer (KYC) checks, Anti-Money Laundering (AML) compliance, and Combating the Financing of Terrorism (CFT) measures for virtual currency transactions.The government has also taken steps to curb misleading advertisements. The Advertising Standards Council of India (ASCI) mandates that all crypto and digital asset-related advertisements must carry disclaimers stating that such assets are unregulated and highly risky, with no regulatory recourse for losses.
Consumer protection & reporting system
To assist victims of financial fraud, the Ministry of Home Affairs (MHA) has set up the Indian Cyber Crime Coordination Centre (I4C), which supports law enforcement agencies in tackling cybercrime.
Additionally, the Citizen Financial Cyber Fraud Reporting and Management System enables immediate reporting of fraudulent transactions, including those linked to unauthorised trading platforms.
Despite the low number of complaints received so far, the government continues to urge investors to avoid trading on offshore platforms that operate outside India’s financial regulatory framework, warning that such transactions carry legal, financial, and security risks.
Last month, Reserve Bank of India (RBI) Governor Sanjay Malhotra hinted that the government’s hardline stance on cryptocurrency could soften. Malhotra said a discussion paper on cryptocurrency is planned, but refrained from sharing an opinion until the paper is published.
Malhotra’s remarks came days after the government signalled that it would revisit its cryptocurrency matrix in light of recent developments in the global scenario.
Also read: RBI governor hints at shift in cryptocurrency stance
