A study on cryptocurrency and regulatory compliance for investor protection in the Indian context

Abstract

The financial sector in India is concerned with how cryptocurrency is regulated when it comes to taxation, following the rules, and securing investors. Looking at sector vulnerabilities, the latest investment trends, and governance in each industry, this study assesses the success of regulations. Peer-reviewed publications and reports from regulators were used in the mixed-method approach of this study. The Chi-Square Goodness of Fit Test indicates that the regulatory events were similarly distributed throughout, hinting at a reactive way of policymaking. Retail investors make up the majority of the market, according to Gini coefficient results, which further points out large inequality in the way investing is done. It was determined in the tax responsibility assessment that the single 35% tax rate negatively impacts small investors and discourages them from investing further. The low agreement among regulatory authorities points out that it is important to develop similar policies. Suggested by the paper are graded taxes, planned educational initiatives for investors, and compliance processes carried out on the blockchain. Authors should consider further investigating how cryptocurrency laws have been applied over the years and using big data analytics to enhance predictive models.