Beluga Exclusive: Interview with Sumit Gupta, Co-Founder of CoinDCX

About Sumit Gupta

An IIT Bombay (India’s premier technology institute) alumnus, Sumit is a visionary entrepreneur and technology leader. He sparked the crypto revolution in India and built the first Crypto Unicorn - CoinDCX in India. Sumit is also the founding member of the Bharat Web3 Association and is an active participant in driving the VDA narrative in India. 

He has won several awards and recognitions for his contribution to the emerging VDA  space. The most recent ones include Fortune 40 under 40, Web3 Entrepreneur of the Year by Economic Times, Forbes 30 under 30, Indian Achievers award, CEO of the Year 2020, and has also been featured on Hurun India list.

Questions:

1. You have done a great job building CoinDCX into one of the largest crypto exchanges in the world.  But how did you first get into crypto?

When Bitcoin started gaining attention in 2014, I recognized the immense potential of blockchain technology as a transformative tool that could positively impact any country, its economy and people. The idea of a decentralized financial system resonated with me deeply, especially given India’s vast unbanked population. In 2018, my IIT classmate and cofounder, Neeraj Khandelwal, and I decided to turn this vision into reality by founding CoinDCX. Our goal was clear: to build and nurture the Indian crypto and Web3 ecosystem.

Looking ahead to 2025, India will have nearly 1 billion people online, with 850 million expected to use smart devices. If these trends hold true, it’s highly likely that Web3 will touch at least 200 million people. At CoinDCX, we believe the true power of virtual digital assets (VDAs) lies in their ability to drive financial inclusion on an unprecedented scale. Our mission is: to onboard at least 50 million Indians and provide them with safe, simple access to this new, decentralized financial ecosystem. We’re excited about the future, knowing that every step we take today brings us closer to that vision.

2. India’s regulatory policy around crypto has always been a little unclear.  Were you nervous about getting into crypto when you could have just stayed in traditional tech?

When Neeraj and I founded CoinDCX in 2018, we knew we were taking an unconventional path. We left behind stable careers in traditional tech, driven by a belief in blockchain's potential to transform India. Just before launch, we hit a major obstacle—the RBI’s banking ban on crypto. It was a tough moment, but we didn’t let it stop us. We knew that the future of Web3 was bigger than any regulatory challenge.

Instead of shying away, we saw an opportunity to address the real barriers in the space: the complexity of crypto, poor user interfaces, and lack of security. We believed that if we could solve these problems, we could bring crypto to the masses. So, we focused on building a platform that was both secure and simple to use, prioritizing customer experience at every step.

Fast forward to today, CoinDCX is India’s first crypto unicorn with over 16 million users. We’ve become the largest and most trusted crypto exchange in the country, and we’re committed to the highest standards of compliance and security. We’re the first FIU-registered entity and hold ISO 27001:2022 certification.

In 2023, we also expanded into Web3 investments with CoinDCX Ventures and launched Okto, our first step into decentralized finance (DeFi). What started as a leap of faith in 2018 is now a thriving ecosystem—and we’re just getting started.

3. A lot of people around the world believe that India will drive crypto adoption.  In your view what regulations need to happen that will drive crypto in India?  Are you currently working with the Indian regulators to help that?

That’s true, it is amazing to see millions of Indians having so much of trust in this emerging asset.  To fully realize the potential of the sector, three key regulatory measures are essential. First, reducing the TDS rate from 1% to 0.01% would enhance the competitiveness of Indian exchanges, encouraging both capital and users to remain within the domestic ecosystem while also fostering better tax compliance. Second, adjusting the capital gains tax structure by taxing short-term gains at higher rates and offering exemptions for long-term holdings would promote innovation and attract long-term investment, aligning India with global standards. Finally, establishing clear and streamlined regulations through a licensing system would ensure consumer protection, foster fair competition, and create an environment conducive to investment and talent attraction. By drawing lessons from successful models in places like Singapore and Switzerland, India can build a regulatory framework that safeguards investors while encouraging growth in the VDA sector.

I have been spoken about the need for clear regulation at every opportunity, and our team is in regular touch with policymakers. We’re also founding members of the Bharat Web3 Association, which is actively working to shape the industry’s future.

I always emphasize that India is not alone in recognizing the potential of blockchain. Countries like Singapore, Switzerland, and the UAE have created favorable environments for Web3 innovation, attracting billions in investments. If India doesn't act decisively, we risk falling behind. It’s time to create the right regulatory conditions to realize the full potential of this technology.

4. What are some of the reasons why someone would use CoinDCX over the multinational exchanges like Binance?

When it comes to investing, especially in emerging asset class,  security and trust are paramount. CoinDCX offers a distinct advantage for Indian users. As an Indian homegrown company with both Neeraj and I committed to the Indian market, we are subject to all local compliance standards, ensuring that we are fully accountable to Indian authorities. This offers a level of transparency and security that might not be as easily guaranteed with foreign platforms. Our 500+ workforce operating from 3 physical offices across Bangalore, Mumbai and Delhi and an active customer support desk further strengthens the trust of the users.

Moreover, we prioritize user experience. CoinDCX’s interface is designed to be intuitive and easy to navigate, making it accessible for both beginners and experienced traders. We understand that a seamless, customer-focused experience can make all the difference when it comes to managing your investments. So, beyond just security and regulatory compliance, CoinDCX is committed to providing a platform that truly understands and caters to the needs of Indian crypto users. 

5. In light of recent security breaches with Indian exchanges (WazirX, BitBNS), what steps or security protocols are you implementing to protect user assets on CoinDCX?

To safeguard our users, CoinDCX has implemented several advanced security measures. We are ISO/IEC 27001:2022 certified, a globally recognized standard for information security, ensuring that we meet the highest security benchmarks. Additionally, we utilize Multi-Party Computation (MPC), which enhances data privacy by allowing secure computations across multiple parties without exposing sensitive information.

Approximately 95% of all funds are stored in a multi-signature cold wallet, ensuring safety of users’ funds. We’ve also introduced the Crypto Investors Protection Fund (CIPF) to provide an extra layer of security, ensuring users are protected in the event of any breach. Beyond that, we employ additional layers of security, including two-factor authentication (2FA) to protect accounts, and advanced encryption to secure user data. Our AI-powered fraud detection systems continuously monitor for suspicious activity. For even greater protection, we leverage an air-gapped architecture, which stores sensitive data in isolated systems, making it fully protected from external threats.

Finally, with data localization and strict protection standards, we ensure that all user data is stored and safeguarded within India, respecting local regulations and providing users with confidence that their data is in safe hands.

For Indian exchanges, we are also envisioning Bharat Custody solution, designed to safeguard crypto assets in a reliable and secure custody solution that aligns with local needs.

6. Crypto withdrawals are currently disabled on CoinDCX. Any time frame on when they will be re-enabled for users?

As India’s largest crypto exchange, we strictly comply with Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT) guidelines set by the Financial Intelligence Unit (FIU). We take pride in this compliance to protect our customers and the ecosystem. 

Unrestricted crypto withdrawals have previously exposed exchanges to malicious activities that can jeopardize our bank accounts that hold customer funds. For instance, bad actors could deposit INR and withdraw crypto for illicit purposes, potentially leading to the freezing of our bank accounts by legal authorities where we hold user INR funds. That’s why we’ve taken a conservative approach to withdrawals, prioritizing the safety of user INR funds. For the safety of the majority of our userbase, we are forced to disable crypto withdrawals for all users. Users still have the unrestricted access to make INR withdrawals though. 

But CoinDCX is diligently working on an opt-in feature based on an enhanced due diligence (EDD) mechanism for enabling crypto withdrawals in a phased manner!

7. India’s crypto taxation is one of the highest in the world. Do you see it dropping in the coming years?

India’s crypto taxation, one of the highest globally, has led to significant challenges for the domestic market. Since the introduction of capital gains tax and TDS on Virtual Digital Assets (VDAs) in 2022, India has already lost an estimated Rs 6,000 crore in tax revenue. Looking ahead, a report released by the ESYA Centre suggests that the country could miss out on an additional Rs 17,700 crore in tax revenue over the next five years, largely driven by a shift in trading activity to offshore platforms. While the TDS was initially introduced to track the movement of crypto assets, it has inadvertently driven traders to offshore exchanges. Despite regulatory measures like the Prevention of Money Laundering Act (PMLA), more than 60% of VDA trading volume is now happening offshore, where TDS collections are either non-existent or minimal. Furthermore, this shift exposes investors' funds to greater risks, as the absence of a regulatory authority makes it difficult to address issues or resolve disputes that may arise during transactions.

To address this issue, it is essential that the existing TDS rate of 1% be reduced to 0.01%, aligning it with other asset classes like securities. This adjustment could make domestic exchanges more competitive, encourage users to trade on compliant platforms, and boost tax compliance. Such a move could potentially generate up to Rs 18,300 crore in tax revenue over five years. Given India’s strong grassroots adoption of crypto, aligning the tax framework with global standards would not only address the revenue loss but also ensure that India maintains its position as a leader in the Web3 space. I sincerely hope that crypto tax rates will drop in the coming years.

8. Mukesh Ambani recently launched a token? Do you think that will create a domestic token boom where everyone will start launching tokens in India?

What’s most significant about this development is there is a clear signal that crypto and Web3 are moving into the mainstream. What we’re seeing now is a broader acknowledgement of Web3’s potential. It’s no longer just a space for crypto enthusiasts or startups; large corporations are beginning to see the value and are actively exploring how to integrate these technologies into their business models. As more of these traditional giants invest in Web3, it will catalyze wider adoption and innovation, which will benefit the entire ecosystem, both locally and globally. So, while a domestic token boom may follow, the real win is the mainstreaming of crypto—transforming it from a speculative asset to a critical part of the Indian economy.

9. The founders of Polygon moved to Dubai and Dubai has become a crypto hub.  Do you see India eventually becoming a crypto hub?

I’m confident that India has the potential to become a global crypto hub. While regulatory clarity has been a challenge, India continues to lead in terms of crypto adoption, with the number of users growing year on year. Indians have always been quick to embrace technological innovation, and this trend is no different when it comes to blockchain and crypto.

The rapid pace at which India is adopting crypto speaks volumes about the opportunity here. With the right regulatory framework in place, India could easily establish itself as a key player in the global crypto ecosystem, just as Dubai has done in recent years.

10. What new things are you working on at CoinDCX this year?

 As we are in the middle of a bull run and anticipate millions of new users joining this year, the key question for us is: How do we scale while maintaining an exceptional customer experience? Our goal is clear: to meet the increasing market activity head-on with proactive solutions that enhance, not hinder, the experience. The entire team is dedicated to refining every touchpoint, closing any gaps, and delivering results that exceed expectations. We’re fully prepared to embrace this moment of growth and lead the way forward. We are focused on simplifying and streamlining the customer journey—from improving onboarding to making the trading experience smoother and more intuitive for all users.

One of the key enhancements will be Click-to-Call support for our top-tier VIP customers, providing them with direct, personalized assistance for any of their needs. We’re also investing heavily in AI-powered self-serve solutions, which will enable users to resolve queries quickly and independently, without having to rely on support teams.

In addition to our ongoing efforts to enhance the core CoinDCX experience, our Okto team is actively working on making Web3 more accessible by tackling the user experience challenges that have historically hindered adoption. We’ve already launched the Okto Chain, and we’re excited to announce that the Okto Token will be launching soon as well. Our goal is to bridge the gap between Web2 and Web3 by helping traditional companies integrate Web3 technologies seamlessly. To support this, we’ve developed the Okto SDK, which makes it easier for Web2 companies to adopt Web3 solutions.

It’s an exciting time for the industry, as chain abstraction is becoming one of the most important conversations in the Web3 space, and we’re proud to be leading the way in simplifying this transition.

11. What are you most excited for in crypto in the coming years?

The next few years in crypto are poised to be transformative, with 2025 shaping up to be a pivotal moment. We are seeing a convergence of technological advancements, regulatory clarity, and growing institutional adoption that will drive crypto deeper into the mainstream financial ecosystem. Investor behavior is shifting from speculation to strategic investment, with Bitcoin and Ethereum expected to become key components of diversified portfolios. 

The global market is moving towards more mature and stable investments, much like the U.S. equities market post-2008, and this trend will likely accelerate in 2025 as institutional and retail investors alike focus on long-term value over short-term gains. This evolution will be bolstered by upcoming IPOs from crypto and Web3 companies, which will provide greater transparency and institutional confidence, driving further capital inflows into the sector.

Regulatory clarity will also play a critical role in the coming years. The political climate in countries like the U.S., UK, UAE, and Singapore is shifting in favor of crypto, and their evolving regulatory frameworks will create well-regulated, competitive markets that attract global investors. Geopolitical dynamics, such as potential trade tensions and currency fluctuations, will likely push more investors towards decentralized assets like crypto, which offer a hedge against traditional market volatility. The next few years will set the stage for what could be one of the most significant transformations in the financial sector.

12. What are some of your favorite crypto tokens that you personally own?

I have a strong belief in Bitcoin as digital gold. It remains the most established and trusted asset in the crypto space. For anyone starting out in crypto, I always recommend beginning with Bitcoin, and doing so with a small amount to ease into the market. The key is to educate yourself first—understanding the fundamentals of the asset and the market will help you make informed decisions.

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