Radhika Gupta’s warning shifts India’s digital-asset debate from returns toward a harder question: What happens when investors need protection? Speaking at the India Today Woman Summit 2026, the Edelweiss Mutual Fund managing director and CEO answered bluntly: “Don’t buy crypto.”
However, Gupta narrowed that warning to India and suggested her answer could differ in the United States. That distinction separates market risk from investor-protection risk. Bitcoin can lose value while remaining accessible, but platform failure can block access entirely.
Radhika Gupta Warns India’s Crypto Risk Goes Beyond Bitcoin
Gupta’s argument therefore focuses less on Bitcoin returns and more on the infrastructure surrounding ownership, custody, and investor recourse. That matters because India is already one of the world’s largest crypto markets.
Chainalysis ranked the country first in its 2025 Global Crypto Adoption Index. It also ranked first across retail centralized activity, overall centralized activity, DeFi, and institutional centralized activity.
Separate Chainalysis research estimated that about $338 billion in on-chain value entered the country during the 12 months through June 2025. Adoption is therefore already substantial. The sharper question is whether investor-protection rules are developing at the same speed.
Bitcoin Volatility Differs From Investor Access Risk
That gap matters as Bitcoin volatility represents only one type of risk. A 25% decline can reduce portfolio value sharply, yet the investor may still control the underlying asset. By contrast, intermediary failure creates a different problem.
Insolvency, hacking, or withdrawal restrictions can make price performance secondary as access to the asset itself becomes uncertain. As a result, custody arrangements, asset segregation, and legal recovery processes can become more important than short-term market direction.
Bitcoin may recover after a market decline. By contrast, assets trapped inside a failed intermediary may depend on restructuring proceedings, court orders, or creditor negotiations before investors regain access.
Why U.S. Investors May Face a Different Equation
Gupta’s U.S. comparison does not mean American investors avoid volatility or platform failures. Instead, regulatory pathways are more developed in several areas. In March 2026, the SEC issued an interpretation explaining how federal securities laws apply to different digital assets and transactions.
U.S. investors can also obtain Bitcoin exposure through exchange-traded products listed on national securities exchanges. However, spot Bitcoin ETPs lack some protections available to traditional funds, while SIPC generally excludes most digital assets.
The U.S. advantage is therefore not protection from market losses, but access to more established regulated routes and dispute channels.
India Taxes Crypto at 30% but Investor Protections Lag
India, on the other hand, taxes income from VDA transfers at 30% under Section 115BBH. Investors generally cannot offset VDA losses against other income. In addition, Section 194S imposes 1% TDS on qualifying VDA transfers.
However, this tax framework does not provide protections for exchange solvency, customer-asset segregation, custody standards, or compensation following platform failure.
As a result, a clear regulatory gap remains. Crypto transactions are recognized for tax purposes, yet investors may still lack protections available through regulated securities intermediaries.
FIU Registration Leaves Key Investor Safeguards Unresolved
India has also brought VDA service providers under anti-money-laundering rules. A March 2026 Lok Sabha response said 54 VDA service providers were registered with the Financial Intelligence Unit by March 9.
Nevertheless, FIU-India said it does not publicly list registered providers, considering that users could mistake registration for government approval or licensing. The agency warned that investors might incorrectly assume such registration guarantees protection or recourse after fraud or losses.
WazirX Exposes India’s Crypto Recovery and Recourse Gap
That distinction became especially important after the WazirX cyberattack. The incident showed how access risk can overtake market risk when assets become trapped inside a centralized platform.
Following the 2024 attack, the Delhi High Court asked the Union government, RBI, and SEBI what regulatory mechanism applied to platforms such as WazirX.
The recovery process then moved beyond India. In October 2025, the Singapore High Court sanctioned Zettai’s restructuring scheme after 95.7% of participating creditors supported it.
WazirX later said eligible users received an initial distribution representing roughly 85% of approved claims at the scheme’s reference valuation.
As a result, the episode highlighted a broader investor-protection gap. Recovery can depend on contracts, restructuring proceedings, and foreign courts rather than on an asset’s eventual market rebound.
Better Crypto Rules Could Reduce India’s Non-Market Risks
That gap explains why stronger regulation could materially change the risk equation for Indian investors. Better rules would not prevent Bitcoin from falling 20%, 30%, or more during a market correction.
However, licensing could establish minimum standards for exchanges, while asset-segregation rules could reduce uncertainty over customer holdings during insolvency. Similarly, custody requirements could define how digital assets must be safeguarded.
Formal grievance mechanisms could also clarify where investors should seek redress when disputes arise. Investors should therefore watch for rules covering licensing, custody, segregation, insolvency treatment, and formal grievance procedures.
They should also monitor which authority ultimately receives responsibility for digital-asset investor protection. So, is regulation now a bigger risk than Bitcoin volatility in India?
On a daily basis, probably not. Bitcoin remains the more immediate financial risk. However, the regulatory gap can become the larger tail risk, as it affects whether investors can access or recover assets after a failure.
Related: India’s Crypto Tax Regime Could Face a Shake-Up: Could Modi Cut the 30% Tax and 1% TDS?
