Maharashtra's legislature passed an amendment to its depositor protection statute that explicitly brings cryptocurrencies and virtual digital assets into its reach. The change gives authorities power to trace, attach, value, and liquidate digital holdings linked to fraudulent investment schemes.
The amendment stops short of legalizing crypto or creating a licensing framework for exchanges or custodians. Instead, it slots crypto into existing consumer protection machinery, treating digital asset seizure much like authorities already handle bank accounts or property in fraud cases.
India has taxed cryptocurrency gains since 2023 under a 1% transaction deducted at source (TDS) rule, but the country lacks a comprehensive national crypto regulatory framework. This makes Maharashtra's move a state-level response to a gap in federal policy.
Authorities can now freeze and liquidate crypto holdings when investigating investment frauds, a practical tool given India's exposure to pump-and-dump schemes and unregistered investment platforms that operate across state lines. The amendment does not require exchanges to register with state regulators or establish custody standards.
No other Indian state has enacted similar protections to date. The deadline for implementation or any accompanying rules remains unclear from available public statements.