India’s financial watchdog has reportedly revealed a troubling trend in the cryptocurrency sector. There, client deposits for exchange are relocated without the knowledge of the investor. According to a research by the Income Tax Agency, the platform routinely uses customer tokens to lend, staking or improve liquidity, granting users the right to sell their holdings while maintaining profits. The authorities have confirmed that terms and conditions often allow such practices, but investors are unaware when certain assets are restructured or mixed. Experts warn that this reflects the risks seen in global failures like FTX. The Indian executive body has acknowledged that the explicit regulatory framework does not restrict the handling of deposits in this way and therefore cannot intervene.
