The demand for cryptocurrencies has witnessed a bullish run in the Indian market ever since the Supreme Court removed the ban imposed by the Reserve Bank of India (RBI) in March 2020. It has become an important asset class, especially for the young and technologically-agnostic sections of the population. Both fintech companies and banks have started creating bank accounts and wallets to trade in crypto. This indicates that cryptos will soon be formally accepted in the broader financial system. It is not just used for daily trading but also being viewed as a viable long-term investment.Though close to 1.7 million Indians actively trade in digital assets, Cryptocurrencies have still not been recognized as a legal tender by the Government. Hence, appropriate legislation is the need of the hour, with the focus shifting towards safeguarding the rights of investors and preventing unscrupulous activities like terrorism financing and money laundering. The Union Finance, Electronics and Information Technology, and Law Ministries, along with the RBI are planning to pass a bill in the Parliament soon.There have also been reports that India is planning to impose an 18% tax on Bitcoin transactions that would yield a revenue of $1 billion to the government every year. These recommendations came from the Central Economic Intelligence Bureau (CEIB). This can encourage institutional investors to participate in the space. GST has already been levied on Indian Cryptocurrency exchanges like WazirX, CoinDCX, and Bitbns for trading fees.What Indian Investors need to be aware of while dealing in Crypto?Cryptos are increasingly used in online betting rackets.Indian investors have lost more than $500 million in various scams between 2017 and 2019, according to data published by CoinTelegraph.Many fake Altcoins and dubious Crypto wallets are emerging in the market, cheating gullible investors through false Cryptocurrency creation.Blockchain-based wallets offer handsome discounts to get investments and stop responding to the investors after a certain period.43 investors were cheated for more than $340,000 by a Delhi-based Crypto platform named Pluto Exchange. It issued a Cryptocurrency named Coin Zarus in exchange for investments by promising 20–30% returns.Many Ponzi schemes have been initiated that promise more returns than other conventional financial instruments.Multi-level marketing (MLM) schemes are also targeting investors by swindling away their money to other countries.Some Indian Cryptocurrency exchanges like CoinDCX have taken several steps like secure custodianship of assets, the geographical distribution of cold wallets, withdrawal confirmation, multisignature Bitcoin wallets, two-factor authentication, and automated KYC verification to protect the investors.Hence, investors need to conduct due diligence properly to avoid becoming a victim of Crypto fraud.The Latest Developments in India related to CryptocurrencyUnicas, a Crypto bank, has launched its services by starting 14 branches in India by establishing a joint venture between Cashaa and United Multistate Credit Cooperative Society. It plans to grow to 100 branches by the end of 2022.Indian crypto trading volumes have grown by more than 500% since March 2020.According to Paxful, India is the second biggest market for Bitcoin in Asia and the sixth-largest in the world.Leading banks like HDFC Bank, Yes Bank, ICICI Bank, and the State Bank of India have resumed doing business with Indian Crypto exchanges.CoinDCX, a Cryptocurrency exchange that operates in Mumbai, raised $13.9 million in funding from Block.one.Many blockchain and crypto-related startups are going to emerge in the country in 2021, backed by foreign capital.According to a report prepared by CREBACO (Credit rating for exchanges, blockchain, and coin offerings), the crypto market in India has grown by 40% in the last two years.A Chennai-based crypto trading startup, Giottus is offering trading through an open order book and peer to peer exchange on their platform with more than 100 different digital currency pairs. Its monthly registration has grown by 15 times since March 2020.Vauld, a Crypto lending platform, recently raised $2 million from Pantera Capital and Coinbase ventures to expand its India operations.Daily crypto trading in the market is around Rs 30 crore, with the majority of the demand arising from the 20–40 age group.The Future in Store for Crypto Development in IndiaPolicymakers are taking concrete steps to regulate virtual currency in India. The introduction of a digital rupee will be positive for investors and traders. Amendments will be made in various laws like the Income Tax Act, The Goods and Services Tax, and the Foreign Exchange Management Act in the years to come. The government can try to bring all the Crypto exchanges under the Prevention of Money Laundering Act, 2002 (PMLA) as they will be treated in the same manner as stock exchanges and banks.Cryptocurrency startups have launched the Digital Asset and Blockchain Foundation of India to educate the common man about the advantages of using Cryptocurrencies. The committee includes members from Zebpay, Unocoin, and Searchtrade. A solid framework is needed to ensure the growth of Crypto development in the country to take full advantage of the digital economy.Check out our new platform 👉 https://thecapital.io/https://twitter.com/thecapital_iohttps://medium.com/media/3b6b127891c5c8711ad105e61d6cc81f/hrefThe Significance of Crypto for Indian Investors was originally published in The Capital on Medium, where people are continuing the conversation by highlighting and responding to this story.