Bitcoin, Crypto Rules in India, and How to Start Safely: Umesh Kumar (Sun Crypto) on The Sarvesh Mishra Show
Watch: Crypto Banega India Payment System? | Bitcoin & Crypto for Beginners | Umesh Kumar @suncryptoin · ~75 min
Is crypto legal in India? Is it safe? Is Bitcoin an investment — or just speculation? And what happens if an exchange shuts down? Those questions filled the comments after Sarvesh first sat with Umesh Kumar more than a year ago. This follow-up, about an hour and fifteen minutes, answers them in plain language.
Their first conversation is a separate episode. This one is also distinct from the Show conversations with CA Nitin Murarka on options trading rules and Priyank Sharma on intraday traps. For the series itself, start at What Is The Sarvesh Mishra Show?
Figures above are as stated by the guest in the episode. Tax rules change; verify independently.
When the Strait of Hormuz was blocked, the demand was for crypto
Sarvesh opens with a news item. When the Strait of Hormuz was blocked, the demand reportedly was not for dollars or gold — it was for crypto. Why would that be?
Umesh answers through control. Rupees sit with the RBI. Dollars and euros sit with their central authorities. Those bodies can mint, burn, track and freeze money. Bank accounts can be frozen in a dispute.
Bitcoin is different. Once it reaches a wallet address, no government or authority can block it. Asking for dollars would invite sanctions and pressure. Euros would be traceable. Bitcoin sits outside that central control — which is why, in his telling, it makes sense in a situation like that.
Once Bitcoin reaches your wallet address, no government or authority can block or stop it.
— Umesh Kumar, The Sarvesh Mishra Show Episode 26
What Bitcoin actually is
Umesh does not treat Bitcoin as one thing. He splits it three ways.
Technology. Blockchain came first. Bitcoin is built on it.
Origin. It emerged around 2009, after the Lehman Brothers crash shook the financial system. It was first dismissed as a scam or a Ponzi scheme.
Asset class. Indian tax rules call it a Virtual Digital Asset. Other countries treat it as a security or an asset.
He also calls it digital gold — because its supply is limited, unlike gold, where new supply keeps entering the market. There are 16,000+ cryptocurrencies, with Bitcoin at the top. His view is that coins such as Bitcoin, Ethereum and Solana are the “blue chips”: less speculative. Smaller coins can swing 50–60% in a day and are more open to manipulation. For long-term goals, he says, stay at the safer end.
Bitcoin’s market cap, he notes, is over $1.5 trillion — and he flags that the exact figure should be verified. Large institutions such as BlackRock hold or offer Bitcoin ETFs.
- RBI, the Fed and other central banks can print, burn, track and freeze it
- Bank accounts can be frozen during disputes
- Controlled by an issuing authority, not by the holder
- Once it is in your wallet, no authority can stop the transfer
- Controlled by holders — whether they own 2 Bitcoin or a tiny fraction
- That holder-control is the core of “decentralisation”
The hawala question
Sarvesh puts the common charge on the table: does crypto enable hawala and harm the country?
Umesh does not deny that crypto is used in illegal activity. He argues the trail is the opposite of cash. Hawala began with cash, which leaves no record unless a camera happens to catch it. Crypto transactions sit permanently on a public blockchain. A third party can follow funds from wallet A to B to C to D. The trail cannot be erased. With the right tools and policy, he says, every transaction can be monitored — which is a strength regulators can use, not a reason to pretend the technology has no record.
How the world moved — and how India got here
Around the world, the picture is no longer a blank. The United States is moving toward legalisation, with a major legislative act — the Clarity Act — said to be in the approval process. UAE, Hong Kong, Singapore, Thailand and Japan already have regulations. Bhutan’s government, he says, holds Bitcoin itself. In Thailand, crypto ATMs and payments already work.
India’s path was slower, and more stop-start.
- 2014–15The RBI signalled that crypto was a scam or a pyramid scheme.
- 2017–18Banks were barred from dealing with crypto exchanges. Panic followed. The Supreme Court later struck the ban down.
- After the courtCrypto was brought under PMLA, with transaction monitoring.
- TaxThe government introduced 30% tax and 1% TDS.
- NowExchange guidelines, including KYC. A full licensing and regulatory framework is the expected next step.
Umesh compares this to the internet and UPI. Had India rejected the internet over fraud fears, UPI would not exist today. A 30% tax and TDS regime, Sarvesh notes, is also a signal: the government does not treat crypto as banned. Umesh agrees — while adding that tax is not the same as formal approval as an investment product. India, in his telling, is moving from bans toward regulation: exchange guidelines, taxation, and now investor-protection guidelines.
The tax, in one table
Holding crypto does not attract tax. Tax applies when you sell or convert it. If ₹1 lakh becomes ₹2 lakh, the 30% is on the ₹1 lakh gain — not the full amount. 1% TDS is deducted by the exchange. Losses do not attract tax, but they cannot be set off against other income.
| Situation | What Umesh says happens |
|---|---|
| You only hold | No tax until you sell or convert |
| Spot profit | 30% on the gain, plus 1% TDS at the exchange |
| Spot loss | No tax — and no set-off against other income |
| Futures & options | He says gains are treated as business income and taxed by slab, not the flat 30%. Many active traders prefer that route. |
Tax rules can change and depend on individual circumstances. This table is the guest’s explanation from the episode, not a filing guide. Confirm current rules with a qualified Chartered Accountant.
If an exchange disappears
The Financial Intelligence Unit monitors financial transactions, including on crypto platforms. Umesh’s first rule is simple: use only an FIU-registered exchange.
Exchange failures and hacks have happened globally. Some platforms did not survive. For Sun Crypto, he says customer crypto is held in cold storage — devices disconnected from the internet — holdings are insured up to $150 million, and the platform has been running for 6+ years with 30 lakh+ users. Those are his claims from the episode; they should be independently verified.
His checklist before you open an account
- Is it authorised and compliant, and how long has it operated?
- Who are the founders, and how active is the team?
- Is the app simple enough that you will actually use it carefully?
- Does it have insurance, and has it been hacked before?
- Does it offer learning support and risk tools?
- Does it charge monthly or maintenance fees?
Umesh warns that many Indians still use offshore exchanges that do not follow Indian rules. He cites a recent report of 18+ foreign platforms being blocked, with users left a notice period to withdraw. Tax obligations, he adds, may still catch up. Stay with a compliant domestic exchange. He also says trading volumes on Indian exchanges are down 70–80%, which he attributes to the tax and compliance burden pushing traders offshore.
You do not need ₹80 lakh to start
“Bitcoin is ₹80 lakh. I can’t afford that.” Umesh says that sentence stops a lot of people. You do not buy a whole Bitcoin, just as you do not buy a kilo of gold. You buy a fraction. On his platform, that can start from about ₹100.
Opening an account, he says, takes roughly two minutes with PAN and Aadhaar, and money can be added through UPI. Sun Crypto, he says, charges no account-opening or maintenance fees, earns a very small brokerage on trades, and offers new users up to ₹250 in free Bitcoin — with conditions. Treat that last point as a promotional claim from the guest, not an offer from this site.
Building slowly — ₹100 now, more next month — is investing. Chasing daily returns is trading. Crypto runs 24/7, so a working professional can sit at 10 PM or 3 AM in a way the traditional market does not allow. That convenience is also a trap. Related reading on long-term building: Sachin Jain on a ₹1 crore SIP plan and Sanjay Kathuria on SIP and wealth.
Spot is not the same as 10x
This is the part of the episode where the numbers get sharp.
- Pay ₹10,000, get ₹10,000 of Bitcoin
- Gains and losses follow the price, one for one
- No borrowed size
- ₹10,000 controls ₹1 lakh of Bitcoin
- A 1% move is ₹1,000 either way
- You can also go short — profit if the price falls
Stop-loss and take-profit orders exist to protect capital. Leverage still cuts both ways. Losses can be as fast and as large as gains, and you are responsible for your own decisions. The same warning sits under the Show’s markets episodes with Deepak Wadhwa and Priyank Sharma.
The mindset that empties the account
Asked which mindset is most dangerous, Umesh names over-trading and FOMO. After a small loss, people take ten more trades to recover it and lose even more. When prices fall for days, even long-term holders panic-sell — often near the bottom. After hitting a daily target, they keep trading out of greed and break their own rules.
Set your target, book your profit, and stay disciplined.
— Umesh Kumar, on trading psychology
On allocation, his personal approach is to keep roughly 20% of investments in crypto, alongside real estate, stocks and gold. Size the sleeve by how much loss you can truly afford — not by the last Bitcoin cycle. Regulation and global developments keep changing the picture. For the real-estate side of that mix, see Avneesh on real estate investment. For the psychology of breaking your own rules, Coach Jitu Sharma on mindset and NLP.
Stablecoins are not only for traders
Are USDT and USDC just trading tools? Umesh says no. They are increasingly used for cross-border payments and remittances. A bank transfer can take two to three days and cost 2–3% in charges. A stablecoin transfer can arrive in minutes. Licences for such services already exist in places like Canada, the US and Dubai. He mentions that a group of large US banks is building stablecoin infrastructure.
Will crypto replace UPI? He says no. UPI is backed by banks and the RBI and is nearly free. Blockchain transactions carry costs. Crypto, in his view, fits investing, trading and cross-border transfers. In India it is not legal tender: you can trade and invest, but you cannot use it as a payment mode.
80–90% of new market entrants lose money. The main reason, he says, is lack of knowledge — then over-trading and greed. Learn first. Start small. Use demo or paper trading. Choose a safe, compliant platform. Never risk money you cannot afford to lose.
Sarvesh closes with a caution of his own: listen to every guest, do your own research, use AI and Google, read feedback, and only then decide.
Frequently asked questions
Is crypto legal in India?
What is the minimum amount to start investing in Bitcoin?
How is crypto taxed in India?
What does FIU-registered mean?
Can crypto replace UPI?
The conversation treats Bitcoin as a regulated asset class in India — not as legal tender, and not as a guaranteed investment. The practical thread is learn first, start small, use an FIU-registered platform, and confirm tax with a Chartered Accountant. Guest figures such as insurance cover, user counts and promotional offers should be independently verified.
Sarvesh Mishra is an Indian entrepreneur, journalist, interviewer and the host of The Sarvesh Mishra Show. He is the Founder of Red Hot Media House Pvt. Ltd. and CureSoulLife Pvt. Ltd., and the author of Love With Benifit.