Blockchain, Cryptocurrency & Virtual Digital Assets Legal Advisory

Overview

Virtual digital assets in India operate within a rapidly evolving regulatory framework — without dedicated legislation but subject to income tax provisions under Section 115BBH and 194S of the Income Tax Act 1961, PMLA obligations extended to VDA service providers by the Finance Act 2023, SEBI's evolving jurisdiction over crypto-assets with securities characteristics, and the RBI's ongoing caution regarding private cryptocurrencies. For exchanges, VDA service providers, DeFi protocol operators, NFT platforms, and enterprises integrating blockchain technology, the legal position requires continuous re-evaluation. Corpus Juris Legal advises crypto exchanges, VDA service providers, blockchain startups, and enterprises on navigating this regulatory environment. Our advisory covers PMLA registration with the Financial Intelligence Unit (FIU-IND) for VDA service providers — now mandatory under PMLA 2002 as amended — KYC/AML programme design, transaction monitoring, and suspicious transaction reporting obligations. For income tax, we advise on Section 115BBH VDA income taxation, the 1% TDS obligation under Section 194S, and the treatment of crypto-to-crypto transactions and airdrops. For token issuances and digital asset offerings, we analyse the applicable regulatory framework — whether the instrument constitutes a security under the Securities Contracts (Regulation) Act 1956, a collective investment scheme, or an unregulated VDA — and advise on structure to minimise regulatory risk. For blockchain technology integrations in traditional businesses — supply chain, financial services, and healthcare — we advise on the legal characterisation of smart contracts, evidentiary admissibility of blockchain records under the Indian Evidence Act, and data protection obligations for permissioned blockchain networks.

Key Service Components

• ◆PMLA 2002 VDA service provider registration with FIU-IND and AML programme design
• ◆Section 115BBH income tax compliance for VDA transactions
• ◆Section 194S TDS compliance for VDA exchanges and brokers
• ◆Token classification advisory — security, utility, or unregulated VDA
• ◆Token issuance and digital asset offering regulatory risk analysis
• ◆RBI compliance advisory for payment systems integrating digital assets
• ◆SEBI compliance for crypto-assets with securities characteristics
• ◆Smart contract legal advisory — characterisation and enforceability
• ◆Blockchain record evidentiary admissibility under Indian Evidence Act
• ◆DeFi protocol operator regulatory compliance advisory

Our Approach

We provide regulatory advice based on current law and enforcement practice — not optimistic readings of regulatory ambiguity. Every client receives a frank assessment of where the regulatory risk is material and what structural or operational changes reduce it.

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