In India, bitcoin trade is carried by unregulated digital exchanges that are 11 in number according to Tax Department estimates. People are investing in money expecting huge returns as Bitcoin registered a price increase from just $1000 in January 2017 to $15000 at the end of 2017.
But anytime a burst can happen. In that case, investors will lose their money. As Bitcoin has entered a bubble phase and speculators have shown big interest in several other crypto variants, the RBI and Finance Ministry have come with timely warnings against dealing with crypto currencies.
The RBI as the central Bank issues money/payment related warnings on VCs. Regarding the asset/trading security side, the government and SEBI are giving their own cautions. Similarly, the tax Department is scrutinising the actions by investors to check the tax implications.