Crypto Exchanges in India Explore P2P Payments to Bypass UPI
- A crypto exchange official said that 'there is no violation of any regulation or law'.
- Bank transfers in exchange for crediting clients' wallets is also being considered.

Following the NPCI statement regarding Unified Payments Interface (UPI), some Indian crypto exchanges have reverted to peer-to-peer (P2P) transactions.
Coinbase was among the first to suspend UPI.
In the above manner the transactions take place between 2 individuals, which bypasses any restrictions imposed on the cryptocurrency exchange.
The P2P structure is similar to what Paxful has been offering for several years.
An official from one of the Indian crypto exchanges told local media that P2P crypto transactions are not violating the law: “This is not how an exchange should be functioning. It’s certainly less efficient. But, apparently there is no violation of any regulation Regulation Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority (FCA), the US’ Securities and Exchange Commission (SEC), Australian Security and Investment Commission (ASIC), and the Cyprus Securities and Exchange Commission (CySEC) are the most widely dealt with authorities in the FX industry.In its most basic sense, regulators help ensure the filing of reports and transmission of data to help police and monitor activity by brokers. Regulators also serve as a countermeasure against market abuse and malpractice by brokers. Brokers adhering to a list of mandated rules are authorized to provide investment activities in a given jurisdiction. By extension, many unauthorized or unregulated entities will also seek to market their services illegally or function as a clone of a regulated operation.Regulators are essential in snuffing out these scam operations as they prevent significant risks for investors.In terms of reporting, brokers are also required to regularly file reports about their clients’ positions to the relevant regulatory authorities. The most-recent regulatory push in the aftermath of the Great Financial Crisis of 2008 has delivered a material shift in the regulatory reporting landscape.Brokers typically outsource the reporting to other companies which are connecting the trade repositories used by regulators to the broker’s systems and are handling this crucial element of compliance.Beyond FX, regulators help reconcile all matters of oversight and are watchdogs for each industry. With ever-changing information and protocols, regulators are always working to promote fairer and more transparent business practices from brokers or exchanges. Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority (FCA), the US’ Securities and Exchange Commission (SEC), Australian Security and Investment Commission (ASIC), and the Cyprus Securities and Exchange Commission (CySEC) are the most widely dealt with authorities in the FX industry.In its most basic sense, regulators help ensure the filing of reports and transmission of data to help police and monitor activity by brokers. Regulators also serve as a countermeasure against market abuse and malpractice by brokers. Brokers adhering to a list of mandated rules are authorized to provide investment activities in a given jurisdiction. By extension, many unauthorized or unregulated entities will also seek to market their services illegally or function as a clone of a regulated operation.Regulators are essential in snuffing out these scam operations as they prevent significant risks for investors.In terms of reporting, brokers are also required to regularly file reports about their clients’ positions to the relevant regulatory authorities. The most-recent regulatory push in the aftermath of the Great Financial Crisis of 2008 has delivered a material shift in the regulatory reporting landscape.Brokers typically outsource the reporting to other companies which are connecting the trade repositories used by regulators to the broker’s systems and are handling this crucial element of compliance.Beyond FX, regulators help reconcile all matters of oversight and are watchdogs for each industry. With ever-changing information and protocols, regulators are always working to promote fairer and more transparent business practices from brokers or exchanges. Read this Term or law. It’s a simple money transfer from A to B over net banking or IMPS or NEFT, and it’s happening outside the exchange.”
Bank Transfers to the Exchange
Other crypto exchanges have adopted a different method. The client makes a bank transfer directly to a company's bank accounts. Once the funds are received the exchange adds credit to the client's wallet.
A lawyer has warned that the above approach may require regulatory approval and explains why.
“If it’s perceived that by directly accepting funds from buyers, an exchange is offering some kind of a wallet facility to the trader, there would be regulatory issues.
"If an exchange accepts money to sell crypto, considering it as a commodity, or acts as an intermediary engaged in collection of funds, it’s one thing.
"But, if it is receiving funds from thousands of traders and holding it till trades are executed, the question is would it be construed as deposits or wallet facility. If so, it may require regulatory approval."
source: ET
Some Indian crypto investors began shifting towards exchanges outside.
Following the NPCI statement regarding Unified Payments Interface (UPI), some Indian crypto exchanges have reverted to peer-to-peer (P2P) transactions.
Coinbase was among the first to suspend UPI.
In the above manner the transactions take place between 2 individuals, which bypasses any restrictions imposed on the cryptocurrency exchange.
The P2P structure is similar to what Paxful has been offering for several years.
An official from one of the Indian crypto exchanges told local media that P2P crypto transactions are not violating the law: “This is not how an exchange should be functioning. It’s certainly less efficient. But, apparently there is no violation of any regulation Regulation Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority (FCA), the US’ Securities and Exchange Commission (SEC), Australian Security and Investment Commission (ASIC), and the Cyprus Securities and Exchange Commission (CySEC) are the most widely dealt with authorities in the FX industry.In its most basic sense, regulators help ensure the filing of reports and transmission of data to help police and monitor activity by brokers. Regulators also serve as a countermeasure against market abuse and malpractice by brokers. Brokers adhering to a list of mandated rules are authorized to provide investment activities in a given jurisdiction. By extension, many unauthorized or unregulated entities will also seek to market their services illegally or function as a clone of a regulated operation.Regulators are essential in snuffing out these scam operations as they prevent significant risks for investors.In terms of reporting, brokers are also required to regularly file reports about their clients’ positions to the relevant regulatory authorities. The most-recent regulatory push in the aftermath of the Great Financial Crisis of 2008 has delivered a material shift in the regulatory reporting landscape.Brokers typically outsource the reporting to other companies which are connecting the trade repositories used by regulators to the broker’s systems and are handling this crucial element of compliance.Beyond FX, regulators help reconcile all matters of oversight and are watchdogs for each industry. With ever-changing information and protocols, regulators are always working to promote fairer and more transparent business practices from brokers or exchanges. Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority (FCA), the US’ Securities and Exchange Commission (SEC), Australian Security and Investment Commission (ASIC), and the Cyprus Securities and Exchange Commission (CySEC) are the most widely dealt with authorities in the FX industry.In its most basic sense, regulators help ensure the filing of reports and transmission of data to help police and monitor activity by brokers. Regulators also serve as a countermeasure against market abuse and malpractice by brokers. Brokers adhering to a list of mandated rules are authorized to provide investment activities in a given jurisdiction. By extension, many unauthorized or unregulated entities will also seek to market their services illegally or function as a clone of a regulated operation.Regulators are essential in snuffing out these scam operations as they prevent significant risks for investors.In terms of reporting, brokers are also required to regularly file reports about their clients’ positions to the relevant regulatory authorities. The most-recent regulatory push in the aftermath of the Great Financial Crisis of 2008 has delivered a material shift in the regulatory reporting landscape.Brokers typically outsource the reporting to other companies which are connecting the trade repositories used by regulators to the broker’s systems and are handling this crucial element of compliance.Beyond FX, regulators help reconcile all matters of oversight and are watchdogs for each industry. With ever-changing information and protocols, regulators are always working to promote fairer and more transparent business practices from brokers or exchanges. Read this Term or law. It’s a simple money transfer from A to B over net banking or IMPS or NEFT, and it’s happening outside the exchange.”
Bank Transfers to the Exchange
Other crypto exchanges have adopted a different method. The client makes a bank transfer directly to a company's bank accounts. Once the funds are received the exchange adds credit to the client's wallet.
A lawyer has warned that the above approach may require regulatory approval and explains why.
“If it’s perceived that by directly accepting funds from buyers, an exchange is offering some kind of a wallet facility to the trader, there would be regulatory issues.
"If an exchange accepts money to sell crypto, considering it as a commodity, or acts as an intermediary engaged in collection of funds, it’s one thing.
"But, if it is receiving funds from thousands of traders and holding it till trades are executed, the question is would it be construed as deposits or wallet facility. If so, it may require regulatory approval."
source: ET
Some Indian crypto investors began shifting towards exchanges outside.