Confusion reigns in India’s cryptocurrency ecosystem.
The Narendra Modi government and India’s central bank have made it amply clear they aren’t comfortable with virtual currencies. The recent spike in bitcoin’s value, which attracted hordes of investors, has only made the government more vociferous in its criticism.
However, these announcements don’t make these virtual currencies, or trading in them, against the law....So, their status is in a curious limbo—they’re neither legal nor illegal in India...
On Nov. 30, 2017, when investor frenzy was at a high with rising bitcoin prices, finance minister Arun Jaitley said the country doesn’t recognise cryptocurrencies as legal tender....Almost a month later, the government cautioned people against investing in them, warning that they are similar to fraudulent investment schemes and have no legal status yet. “There is a real and heightened risk of  investment bubble (in virtual currencies) of the type seen in ponzi schemes which can result in  sudden and prolonged crash exposing investors, especially retail consumers, losing their hard-earned money,” the finance ministry said in a notification on Dec. 29, 2017. “Consumers need to be alert and extremely cautious as to avoid getting trapped in such ponzi schemes.”