Cryptocurrency has quickly became one of the most talked-about financial markets in the world. Today, people across the globe including millions in India are actively buying and selling digital coins like Bitcoin, Ethereum, and Solana.

As crypto continues to grow worldwide, there is one important question that every trader is asking:
Is cryptocurrency trading legal in India?  
Trading cryptocurrency is legal in India, but it comes with a lot of rules and regulations.

Understanding the crypto legal framework is essential if you are considering prop trading, exploring funded accounts or looking for the best crypto prop firms to grow your earnings.

 Let us breakdown the situation in 2025, untangle the compliance web and make it easier for you to trade crypto freely and effectively.  

Let's start by providing some information before covering India’s legal position on cryptocurrency, taxes, prop trading, and funded accounts.

What Is Crypto Trading? 

Crypto trading is the process of buying and selling digital currencies (also called cryptocurrencies) using online trading platforms. Just like in the forex or stock market, the goal is simple: buy low, sell high, and make a profit.

Popular cryptocurrencies include:

• Bitcoin (BTC)
• Ethereum (ETH)
• Solana (SOL)
• Ripple (XRP)
• Dogecoin (DOGE)

Crypto prices change constantly based on supply, demand, global news, and investor sentiment, creating many opportunities for smart traders. 

It works much like stock or forex trading, but happens on crypto exchanges or trading platforms that are open 24/7.

How Crypto Trading Works (Step-by-Step Guide)

1. Choose a Crypto Trading Platform

To get started, you first need to open an account on a crypto exchange. Popular platforms for Indian traders include:

• CoinDCX
• WazirX
• Binance
• Coinbase

If you're working with a prop firm, you’ll use their selected trading platform and a funded account after passing their challenge.

2. Buy and Sell Crypto Pairs

Crypto is always traded in pairs, like:

• BTC/USDT (Bitcoin vs Tether)
• ETH/INR (Ethereum vs Indian Rupee)

You’re guessing whether the price of one crypto will go up or down compared to the other. If you're right, you earn a profit. If you're wrong, you take a loss.

3. Track Price Movements

Prices are affected by many things, like:

• Market demand and supply
• Global news
• Government regulations
• Big investor movements

This is where skills come in. Many traders use technical analysis, price charts, or AI tools to predict movements.

4. Use Leverage and Margin (Carefully)

Some platforms or prop firms offer leverage, meaning you can trade larger amounts than what’s in your account. It can multiply profits but also losses.

5. Profit Split (For Prop Traders)

If you’re trading through a prop firm, you’ll be using capital provided by them. After your trades generate profit, the firm takes a percentage (usually 20–50%), and you keep the rest. This is called a profit split.

For example:

• You make ₹20,000 profit
• Your prop firm keeps 30% = ₹6,000
• You receive ₹14,000 as your payout

6. Store Crypto in a Wallet

If you’re not actively trading, you can store your crypto in a digital wallet (online, mobile, or hardware-based). This helps you to protect your assets from theft or exchange hacks.

7. Report & Pay Taxes

In India, crypto trading profits are taxed at 30%, with 1% TDS on each trade. Always keep records and use platforms that provide detailed transaction history.

Is Crypto Legal India 2025 Update

Crypto trading is legal in India, but with important conditions.

The Indian government does not consider cryptocurrencies illegal, which means you are allowed to buy, sell, and hold digital assets like Bitcoin, Ethereum, and others. 

However, crypto is also not recognized as legal tender, so you can’t use it to pay for goods or services.
Instead, crypto falls under a category called Virtual Digital Assets (VDAs) and is regulated through tax laws and compliance checks.

What You Can Do Legally:

• Trade crypto on KYC-verified platforms (e.g., CoinDCX, WazirX, Binance India)
• Buy and hold crypto in personal wallets
• Trade through prop firms using funded accounts
• Declare and pay taxes on crypto profits

What’s Not Allowed:

Use crypto as money to buy products or services in India
Trade anonymously through unregulated or peer-to-peer apps
Avoid reporting crypto income doing so violates the Income Tax Act and could attract penalties

In short, crypto trading is not banned, but it's tightly regulated. If you're a trader using prop trading platforms, understanding these rules is important to avoid unnecessary risks.

India’s Crypto Regulation Timeline: A Quick Look Back (2013-2025)

Understanding how India’s legal view has evolved helps put current regulations into perspective:

How Does Crypto Fit Into Prop Trading?

Prop trading is slowly merging with the growing world of cryptocurrency. 

Some of the best prop firms now offer crypto-funded challenges, allowing traders to prove their skills with demo capital before being funded.

Why Traders Choose Prop Firms for Crypto:

• No capital risk when you trade with the prop firm’s money.
• Real profit potential via profit split models.
• Simple trading rules and structured scaling plans.
• Access to top-tier trading platforms with fast execution.

Looking for a prop firm discount offers or a prop firm challenge coupon code? Many platforms offer seasonal deals to help you get started with your challenge at a lower fee.

Legal Crypto Trading Options in India

Every trader and investor must follow certain guidelines as per their legal jurisdictions. Knowing what’s acceptable and what’s not will help traders to trade better and avoid unnecessary risks.

What’s Legal:

• Trading on SEBI-registered or global exchanges with KYC.
• Holding crypto assets in wallets.
• Participating in prop trading crypto challenges.

What’s Illegal or Risky:

• Using crypto for payments.
• Trading on unregulated, anonymous P2P platforms.
• Avoiding taxes or failing to report gains.
• Looking to get started the right way?

Look for prop firms that allow legal crypto trading, providing genuine capital, and reward your trading skills rather than the amount you are holding.

Taxation on Crypto in India

• 30% tax on crypto profits (no deductions allowed).
• 1% TDS on every trade above ₹10,000.
• Losses cannot offset other income.

For funded traders in prop firms, this means your share of the profit split is taxable. Always report your earnings and maintain trading records.

Choosing the Right Crypto Prop Firm

Here’s what to look for when picking the best prop firm for crypto trading:

• Offers a crypto challenge and access to major tokens
• Transparent trading rules and scaling plans
• Competitive fee structure
• Quick funding process with high payout potential
• Reputable trading platform integration

Popular Crypto Prop Firms for Indian Traders

1. BrightFunded

Broker: BrightFunded operates with integrated crypto liquidity providers.  
Operating since: BrightFunded was founded in 2023.
Challenge Fee: BrightFunded challenge fees start from $69 for a $5K Crypto Account.
Traders can enjoy a profit split of up to 80% with BrightFunded.
BrightFunded offers a unique Evaluation model comparison of the 2-Step Challenge (phase-1 Evaluation, phase-2 verification)
Trading Platforms: Platforms supported by BrightFunded are on an undisclosed platform.

Want a full review on BrightFunded? Visit TheTrusted Prop's full review on BrightFunded.

Also, save 30% on BrightFunded challenge fees with The Trusted Prop coupon code: TRUSTED

2. Get Crypto Funded

Broker: The broker associated with Get Crypto Funded is not publicly disclosed.
Operating since: Get Crypto Funded was founded on 10 January 2025
Challenge Fee: Get Crypto Funded challenge fees start from $56 for a $5K Crypto Account.
Get Crypto Funded offers a profit split of up to 80%.
Get Crypto Funded Evaluation models include One Phase, Two Phase, and Three Phase Challenge options.
Trading Platforms: Get Crypto Funded supports trading platforms such as MetaTrader.

Want a full review on BrightFunded? Visit TheTrusted Prop full review on Get Crypto Funded.

Get 25% off with The Trusted Prop coupon code: TRUSTED on Get Crypto Funded challenge fees.

What are the Risks with trading crypto?

Crypto is still volatile, and when paired with leverage or prop firm-funded accounts, the risks can multiply. Here’s what to be aware of:

• Market volatility: Sudden drops can wipe out positions.
• Regulatory changes: Tax laws or platform rules may change.
• Challenge failure: Not passing your evaluation challenge could mean restarting (and repaying the fee).

Pro Tips for Crypto Traders in India

• Always use exchanges with Indian KYC compliance (e.g., CoinDCX, WazirX, or Binance with verified ID).
• Treat crypto like a business track profits, pay taxes.
• Use risk management: stop-losses, portfolio diversification.
• Download and organize all trading account statements.
• Don’t chase pumps. Build strategy and consistency.

The Future of Crypto in India

India is actively exploring a regulatory framework for cryptocurrencies. While CBDC (Central Bank Digital Currency) is already in pilot phase, separate legislation for crypto is expected.

That means more clarity for prop firms, traders, and institutions who want to offer or use funded accounts for digital assets.

Conclusion: While Crypto Is Allowed, Smart Trading Is Mandatory

Indeed, crypto trading is legal in India. There are legal frameworks for crypto to follow, taxes to pay, and considerable challenges.  It protects traders. And it gives serious professionals especially those using prop firm models a pathway to scale their skills.

At The Trusted Prop we aim to simplify the journey. 

Be it your first time trading crypto or you're looking to scale up with a funded account, we pair you with trustworthy prop firms, and with our exclusive discount codes, ensure you to start safely and stay protected.

Ready to Trade Crypto the Smart Way?

• Find the best prop firm for crypto traders in India
• Claim your exclusive crypto prop firm discount code and pass your first challenge
• Access professional tools and scalable, funded accounts
• Sign up now and explore trading platforms that reward skill, not just capital.

Still unsure? 

Read our in-depth reviews of Top Crypto Prop Firms or head to our Best Deals Page to save on your first funded challenge.