The point
A crypto exchange in India is a company that takes your rupees and buys or sells crypto on your behalf. It holds both sides of that trade, your rupees and your crypto, until you move them out. It owes you a balance instead of letting you hold crypto directly, backed by assets sitting in wallets the exchange controls. Every check worth running on a platform starts from that one fact.
What counts as a crypto exchange in India
Search for an exchange for cryptocurrency in India and every result promises the same thing: low fees and a long list of coins. Strip away the branding and every exchange runs the same plumbing between your bank account and a coin's market price. You complete KYC, send rupees in, and place an order. The exchange matches that order against its order book and credits your account with crypto at whatever price the book is showing that second. Sell, and the plumbing runs the other way: crypto out, rupees in, both changes recorded against a balance the exchange keeps on your behalf.
That balance sits inside one of a small set of standard custody models, and almost every retail exchange operating in India runs the same one: exchange custody, not self custody. The exchange holds the private key, the code that authorizes moving a coin on its blockchain, and your account shows a number it owes you against that key. A wallet you control yourself works the other way around. You hold the key, and no company sits between you and the blockchain.
Where your money sits once it is inside
Once your rupees convert to crypto, the exchange pools it with every other user's balance. Most platforms keep the bulk of that pool offline in cold storage, wallets that never touch the internet. A small slice stays online in a hot wallet to cover ordinary withdrawals. Cobo, a crypto custody infrastructure provider, puts the typical split at 90 to 95 percent cold and 5 to 10 percent hot, in a guide read on 2026-09-10.
The split matters because the hot wallet is the part a breach can reach. Cold storage narrows that exposure. It says nothing about whether the exchange is quietly spending client money to run its own business, which is a separate question with its own check. Proof of Reserves is built for that second question: a record, live or periodic, that shows an exchange holds what it owes, kept apart from its own operating funds. What a claim on a platform is worth against holding the coins yourself goes further into this, on any platform, exchange or otherwise.
The checks that separate one exchange from another
None of that sits on an exchange's homepage. Five checks, each doable in a few minutes, tell you more than any page the exchange writes about its own business.
1. Registration with FIU-IND, checkable in minutes
Every virtual digital asset service provider operating in India must register with the Financial Intelligence Unit, India, as a reporting entity under the Prevention of Money Laundering Act. The obligation applies whether the platform is based in India or offshore. Any platform can be checked directly against FIU-IND's own list of reporting entities, read on 2026-09-10. That registration carries specific reporting obligations back to the government.
Registration is a floor a platform has to clear, and it says nothing else about whether the platform is safe day to day. A platform that has not cleared it has failed the easiest check there is, before you have looked at anything else.
2. How often it proves what it holds
A one-time attestation is a photograph from months ago. A live record answers the same question every day the platform is open. How to read a Proof of Reserves attestation, using the filings Indian platforms publish walks through the difference with real examples instead of a hypothetical one.
The cadence matters more than the fact of publishing something at all. A platform that shows a number once a quarter is answering a different question than one that updates the same page daily.
3. A Grievance Officer with a real name and inbox
India's IT Rules require every platform to publish a named Grievance Officer, a way to reach them, and a set window to resolve a complaint. How to use a grievance officer well, once a platform has published one, is worth reading before you need it rather than after.
Look up the name. Send a test message if you are unsure the inbox is monitored. A platform with no findable contact behind that page has failed a legal requirement.
4. The fee schedule, once GST and TDS are separated out
The rate an exchange advertises rarely covers the full cost. GST adds another 18 percent on top of whatever fee is quoted. A separate 1 percent TDS is withheld on every sale under Section 194S, passed to the government rather than kept by the platform.
Who deducts that 1 percent is worth checking once, since a platform fee and a statutory deduction get confused often enough to matter. Five checks any fee page should pass turns the whole comparison into arithmetic instead of guesswork. What CoinDCX charges, line by line, and the four costs no fee page shows breaks one exchange's own fee page down to see how these costs stack up in practice.
5. What its own terms promise if withdrawals freeze
Read the clause that covers what happens if the exchange needs to pause withdrawals, deposits, or trading. Crypto app terms of service, six clauses that control your money walks through exactly this kind of language and what it commits the platform to.
Indian crypto exchange hacks, leaks and disputes, five dated incidents is the reason this check exists at all. More than one Indian platform has frozen withdrawals after a breach or a cash crunch, and the clause skipped at signup is the one that decided what happened next.
Where a crypto index platform fits differently
Everything above describes an exchange, a platform built for choosing a coin and trading it on your own schedule. Qatobit works differently: a crypto index investing platform that does not let you pick a coin and place an order against its live price.
Instead, you invest in one of four QSI Crypto Indices, each a basket of assets built on a published methodology and rebalanced monthly. The custody question from above still applies here. Qatobit holds assets under institutional custody and publishes a live Proof of Reserves rather than a periodic one. It charges a single 0.35 percent fee only when a basket rebalances, with no annual charge for simply holding it.
If the job is picking a coin and trading it on your own schedule, an exchange is the tool built for that job. If the job is holding a diversified crypto allocation without picking coins one at a time, an index is doing something else, on the same custody questions covered above.
Before you fund an account
An exchange's job is to be the plumbing between your bank account and a coin's price. Whether it does that job well is not written on its homepage. It is written in its custody model, its Proof of Reserves cadence, and its published grievance contact. It is written in its fee schedule once GST and TDS are separated out, and in its own terms for the day something goes wrong.
The five questions worth asking any Indian crypto platform before your first deposit turns all five checks above into a five-minute routine. Run it on any platform, before you send it a single rupee.
Frequently asked questions
Is a crypto exchange the same as a crypto wallet?
No. An exchange holds crypto on your behalf and shows you a balance it owes you. A wallet you control yourself holds the private key directly, with no company sitting between you and the blockchain.
Does a crypto exchange in India have to register with FIU-IND?
Yes. Every virtual digital asset service provider operating in India, domestic or offshore, must register with the Financial Intelligence Unit, India. Registration makes it a reporting entity under the Prevention of Money Laundering Act, and the list is checkable directly on FIU-IND's own site.
What is the difference between exchange custody and self custody?
Exchange custody means the platform holds your private key and owes you a balance. Self custody means you hold the key yourself, through a wallet only you control, with no company able to freeze or restrict your access.
Does Proof of Reserves prove an exchange cannot fail?
No. It shows that specific crypto exists in specific wallets on a given day, and it can show client funds are kept apart from operating funds. Neither fact guarantees the exchange survives as a business or that a court process could never freeze access.
Is Qatobit a crypto exchange?
No. Qatobit is a crypto index investing platform. It does not support picking an individual coin and trading it on demand. Investors put money into one of four QSI Crypto Indices, rebalanced monthly on a published methodology.
What is the difference between a crypto exchange and a crypto index platform?
An exchange lets you pick an individual coin and trade it at its live market price. An index platform invests you into a basket of assets built on a published methodology and rebalanced on a schedule. You do not pick the coins inside it one at a time.
Does a lower advertised fee always mean a cheaper exchange?
No. A quoted rate can hide a spread, GST charged on top, and how a withdrawal gets priced. Two exchanges advertising the same headline rate can still cost differently once all of that is added up.
Does GST apply on top of an exchange's stated trading fee?
Yes. GST adds 18 percent on top of whatever fee an exchange quotes. A separate 1 percent TDS is withheld on every sale under Section 194S and passed to the government rather than kept by the platform.
Crypto investments are subject to market risk. Not financial advice.
“A better allocation begins with a better explanation.”
Qatobit principle
Published construction. Fixed cadence. Versioned control.
