The recent developments in India’s stance on cryptocurrency have sparked significant discussions among investors and regulators alike. As part of its ongoing efforts to curb illicit financial activities, India’s Financial Intelligence Unit (FIU-IND) has initiated a focused examination of privacy-centric cryptocurrencies.
Enhanced Regulatory Framework for Cryptocurrencies
Market insights highlight the latest directives from FIU-IND, which have been disseminated through various channels, including prominent market analysts. These directives emphasize a crucial restriction on crypto exchanges within India, mandating the cessation of all dealings involving privacy coins such as Monero, Zcash, and Dash.
The core of the regulator’s motivation revolves around the cryptographic technologies that underpin these coins. Privacy coins utilize sophisticated methods to obscure critical information, which can complicate regulatory compliance.
For instance, Monero employs ring signatures to mask transaction origins, while Zcash enables shielded transactions that effectively hide essential transaction details. Dash, on the other hand, incorporates optional features for enhanced privacy.
Although these characteristics are attractive to users valuing anonymity, regulators express concerns regarding their potential to facilitate illicit activities, including money laundering and terrorist financing, thereby limiting exchanges’ abilities to enforce know-your-customer (KYC) measures.
All registered crypto exchanges in India are now obliged to comply with this directive, which entails delisting the specified coins, blocking all related deposits and withdrawals, and ceasing trading activity associated with them.
Market Dynamics of Privacy Coins
This regulatory step falls within a broader strategy by Indian authorities to maintain oversight over cryptocurrency operations in the country. Furthermore, a previous initiative from October 2025 saw FIU-IND compelling internet providers to restrict access to several offshore exchanges that did not adhere to registration requirements.
Currently, a limited number of exchanges remain compliant within India, including reputable platforms like Binance, Mudrex, Coinbase, CoinSwitch (known as CoinSwitch Kuber), and ZebPay, which operate under the regulations stipulated by the Indian government.
Despite facing regulatory headwinds, targeted privacy coins demonstrated a counterintuitive response in the market. Within a 24-hour window, Monero, Zcash, and Dash managed to recover from previous downturns, posting notable gains.
At the time of analysis, Monero was trading at approximately $524, reflecting a daily increase of 3.5%. Zcash also bounced back with a modest rise of 2.2%, valued at $372. Notably, Dash exhibited significant momentum, recording an impressive daily gain of 11.6%.
However, it is essential to note that the overall market sentiment remains bearish. According to sources like CoinGecko, the weekly performance for Monero, Zcash, and Dash indicates steep declines, with approximate losses of 21%, 8%, and 20%, respectively, over the past week.
Source: Featured image generated by DALL-E, data sourced from TradingView.com.
