When the coins come crashing down

livemint.com:

NEW DELHI/MUMBAI : A senior executive from an Indian fintech is in a bind, as about ₹20 lakh of his money is “stuck" in cryptocurrencies. “For the past month, many exchanges are not allowing users to withdraw crypto from their wallets," rued the executive, who did not want to be named. Even exchanges not in the cross hairs of authorities like the enforcement directorate (ED) “have either stopped users from withdrawing crypto, or at the very least alerted them about long delays in executing the trades," said the executive, who is an Indian citizen based in Dubai.

A 22-year-old engineering student from Bengaluru, who also runs a small digital marketing firm, is in a similar muddle. The student, who did not want to be named, had invested around ₹6 lakh in cryptocurrencies till date, “along with contribution from some friends". He has gradually begun moving the holdings from Indian crypto exchanges to international ones to avoid paying the tax deducted at source (TDS). To save more money, he also moves the cryptocurrencies (mostly bitcoin and ether) from international exchanges to a peer-to-peer (P2P) platform, where he exchanges them for e-commerce gift cards.

Till even the beginning of this year, the crypto story in India was riding high on a wave of curiosity and interest, celebrity ads and influencer-speak. Like the two people cited above, a little over 100 million people in India had gone on to own assets in the form of digital currency. But the gloom and uncertainty now is a striking contrast, as the government tightens scrutiny, trade volumes crash, and stories of crypto frauds and ED raids take the shine off the industry.

While the Indian government and the Reserve Bank of India (RBI) have warmed up to the use of