Coinbase Eyes Return to India Amid Regulatory Shift and Security Risks

Cryptocurrency exchange Coinbase has reportedly been in discussions with Indian regulators about a potential return to the market after its 2023 exit. This comes as India’s Financial Intelligence Unit (FIU) has softened its stance on offshore crypto exchanges.

TechCrunch reported that Coinbase is in discussions with multiple Indian regulatory bodies, including the FIU, a government agency responsible for monitoring financial transactions. Two sources familiar with the situation confirmed these ongoing engagements.

Coinbase’s efforts to reenter the Indian market come after a challenging history in the region. If successful, its return would mark more than a year since the exchange ceased operations in India in September 2023.

In April 2022, Coinbase made an initial attempt to enter the Indian market by integrating support for the country’s popular Unified Payments Interface (UPI) system. However, just three days later, the exchange was forced to halt the service after the National Payments Corporation of India (NPCI), the regulatory body overseeing UPI, declined to recognize its operations.

Coinbase notified its Indian users to withdraw their funds as it prepared to shut down all Coinbase Retail services in the country, officially discontinuing operations on September 11, 2023.

Coinbase CEO Brian Armstrong later revealed that the company encountered “informal pressure” from the Reserve Bank of India, which ultimately forced it to pause trading. While cryptocurrency trading remains legal in India, many banks are reluctant to engage with digital asset firms.

The timeline for Coinbase’s return to the Indian market depends on how quickly it can obtain the required regulatory approvals. The FIU had previously deemed several exchanges, including Kraken and Binance, as operating “illegally” in the country. However, some of these platforms have since met compliance requirements, which mandate greater transparency regarding user activities.

India Reconsiders Crypto Policy

India is also reportedly reevaluating its stance on cryptocurrency regulation as global attitudes toward digital assets continue to evolve. The government is currently reviewing a long-awaited discussion paper on crypto policies, which was initially set for release in September 2024. However, the paper’s publication was delayed due to competing policy priorities at the time.

Currently, the country’s framework for digital assets remains limited, addressing only anti-money laundering measures and electronic fund transfers. India has yet to implement specific policies tailored to the cryptocurrency sector.

Coinbase Attack

Coinbase’s potential return to India emerges as the crypto community grapples with concerns over security and fraud prevention. Over the past two months, a series of social engineering scams have resulted in users losing millions, sparking backlash and renewed scrutiny of the industry’s vulnerabilities.

Reports revealed that between December 2024 and January 2025, users fell victim to social engineering scams, resulting in losses totaling at least $65 million. However, reports also indicate that the actual figure could be significantly higher.

A surge of phishing scams targeting Coinbase users has leveraged deceptive emails, fake customer service calls, and fraudulent websites designed to resemble the exchange’s official platform.

Scammers have exploited stolen database information to impersonate Coinbase representatives, contacting victims under the guise of urgent security alerts about compromised accounts.

Users were pressured to take immediate action and redirected to counterfeit Coinbase websites, where they unknowingly provided login credentials or approved fraudulent transactions, ultimately transferring funds to the attackers.

Michaela has no crypto positions and does not hold any crypto assets. This article is provided for informational purposes only and should not be construed as financial advice. The Shib Magazine and The Shib Daily are the official media and publications of the Shiba Inu cryptocurrency project. Readers are encouraged to conduct their own research and consult with a qualified financial adviser before making any investment decisions.

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