Is CoinSwitch Safe and Legal in India? 2026 Check

Yes, CoinSwitch is legal to use in India. It is registered with FIU-IND as a reporting entity, runs full KYC, deducts the 1% TDS on sales, and its March 2026 proof of reserves showed about ₹613 crore more in reserves than customers held. "Safe" has limits, though: your coins are held by CoinSwitch, not by you, and there is no deposit insurance if an exchange fails.

Is CoinSwitch legal in India?

Yes. Buying, holding and selling crypto is legal in India. It is not legal tender, but it is taxed and regulated for anti-money-laundering purposes. Since March 2023, every platform that serves Indian users must register with the Financial Intelligence Unit, India (FIU-IND) as a reporting entity under the Prevention of Money Laundering Act. That means it must verify customers, keep records and report suspicious transactions.

CoinSwitch is run by Bitcipher Labs LLP, a Bengaluru-based limited liability partnership, and that entity is registered with FIU-IND. CoinSwitch is also an early member of ARIFAC, the industry alliance of reporting entities working on anti-money-laundering standards. You can confirm it alongside other platforms on our list of FIU-registered crypto exchanges.

One common confusion: people search for an "RBI approved" exchange. No such approval exists. The RBI does not licence crypto exchanges, and any app claiming RBI approval for crypto is misleading you. Our guide to the RBI approved crypto exchange question explains who regulates what.

What FIU registration does and does not mean

FIU-IND registration means	It does not mean
The platform is allowed to serve Indian users	The government guarantees your money
It must run KYC and keep records	Your balance is insured like a bank deposit
It reports suspicious transactions	Its security or solvency has been audited by the state
Offshore apps that skip it can be blocked	Crypto prices are protected or regulated

Registration is the minimum you should demand from any exchange. It tells you the platform is inside the Indian legal system, which matters if something goes wrong. It is not a safety rating.

How CoinSwitch holds your crypto and rupees

CoinSwitch is a custodial platform. When you buy bitcoin in the app, the coins sit in wallets controlled by CoinSwitch, and your account shows your share. CoinSwitch says customer crypto is kept with global custodians using multi-party computation (MPC) wallets, with more than 95% in cold storage and under 5% in hot wallets for day-to-day withdrawals. Our explainer on hot and cold wallets covers why that split matters.

The strongest evidence of safety is its proof of reserves. CoinSwitch has published six editions so far. The latest, released in May 2026 and dated 31 March 2026, showed:

Asset	Reserves held	Customer holdings	Coverage
Crypto	₹2,140.58 crore	₹1,673.41 crore	1.28x
INR	₹219.75 crore	₹73.83 crore	2.97x
Total	₹2,360.33 crore	₹1,747.25 crore	Surplus ₹613.08 crore

A reserve report is a snapshot of one day. It shows the exchange held enough on 31 March 2026; it cannot show what happens on other days. Still, regular reports with a surplus are a better sign than no reports at all.

Has CoinSwitch ever been hacked?

We found no record of a hack of CoinSwitch's own wallets or systems. Its one security-related loss came from outside. In July 2024 WazirX, a different Indian exchange, was hacked for about $235 million. CoinSwitch had funds parked on WazirX for trading, which it said were less than 1% of its holdings, and those were frozen. CoinSwitch said it covered the gap from its treasury so customers were not affected, and it went to court to recover the money. In January 2025 it also announced a ₹600 crore programme to help WazirX users recover losses by trading on CoinSwitch.

For comparison, see how the wider industry has fared in our crypto hacks explainer.

Account security and KYC

To open an account you complete KYC, as FIU-IND rules require of every registered platform. Expect to give your PAN, verify your identity with Aadhaar, take a live selfie and link a bank account in your own name. The app walks you through each step; our KYC documents guide lists what exchanges usually ask for.

For logging in and approving actions, CoinSwitch uses an app PIN, phone biometrics and OTP-based two-factor authentication. It also states it holds ISO/IEC 27001 certification, an international standard for information security management. Turn on every protection the app offers.

Fees to check before you trade

CoinSwitch fees differ between the simple app, CoinSwitch PRO and futures, and they change from time to time, so check the fee screen in your app before placing an order. The main costs to look for are:

• Trading fee or spread on buys and sells, which may differ for instant orders and PRO limit orders.
• GST charged on the platform fee.
• INR deposit and withdrawal charges, if any, for UPI or bank transfer.
• 1% TDS on every sale. This is not a fee; it is tax deducted against your PAN, which you claim back when you file your return.

To compare costs across apps, see our best crypto exchanges in India guide and the CoinDCX vs CoinSwitch comparison.

What "safe" really means on any Indian exchange

Even a well-run, registered exchange carries risks that you should understand:

• No deposit insurance. Bank deposits in India are insured by DICGC up to ₹5 lakh. Crypto balances have no such cover.
• Exchange risk. If a platform is hacked, freezes withdrawals or shuts down, getting your money back can take months. WazirX users waited over a year. Read what happens if an exchange shuts down.
• No self-custody on CoinSwitch. You cannot move coins to your own wallet, so you cannot shift them away quickly if you lose confidence. Your only exit is selling for INR.
• Price risk. No exchange protects you from falls in crypto prices. Check the live bitcoin price in INR before you buy.
• Scams using the brand. Fake apps, fake support numbers and Telegram "tip" groups use big exchange names. Our guide to avoiding crypto scams shows the common tricks.

How to reduce your risk on CoinSwitch

1. Download the app only from the official Play Store or App Store listing, never from a link in a message.
2. Turn on biometrics, a strong PIN and every two-factor option, and never share an OTP with anyone, including "support".
3. Invest only what you can afford to lose, and spread large sums across more than one FIU-registered platform.
4. If you want to hold coins for years in your own wallet, use an exchange that allows crypto withdrawals instead.
5. Download your tax reports each year and match the TDS in Form 26AS and AIS.

Our full CoinSwitch review covers features and fees in more depth, and crypto tax in India explained covers the 30% tax on gains.

FAQ

Is CoinSwitch registered with FIU-IND?

Yes. Its operator, Bitcipher Labs LLP, is registered with FIU-IND as a reporting entity under the Prevention of Money Laundering Act.

Is CoinSwitch approved by the RBI?

No, and no crypto exchange is. The RBI does not licence or approve crypto exchanges. The registration that matters is with FIU-IND.

Is my money safe on CoinSwitch?

CoinSwitch's March 2026 proof of reserves showed a surplus of about ₹613 crore over customer holdings, and we found no hack of its own systems. But there is no deposit insurance, so keep only what you are comfortable leaving with an exchange.

Can I withdraw bitcoin from CoinSwitch to my wallet?

No. CoinSwitch lets you sell crypto for INR and withdraw rupees to your bank, but it does not support sending coins to an external wallet.

Does CoinSwitch cut TDS?

Yes. It deducts 1% TDS on sales and deposits it against your PAN. You can see it in Form 26AS and AIS and claim it when you file your income tax return.

---

This article is AI-assisted, educational and general in nature. It is not financial advice and never a guarantee of profit. Every trade is at your own risk on your own exchange. See our risk disclosure and editorial policy.