The President of the United States, Donald Trump, has denied having any role in a reported $500 million cryptocurrency deal involving his family and a member of the Abu Dhabi royal family, saying he was not aware of the transaction and that his sons were managing the business separately.

Speaking to reporters in the Oval Office on Monday, Trump said he had no direct knowledge of the deal, while acknowledging that cryptocurrency has become a major area of investment.

“I don’t know about it,” Trump said. “I know that crypto is a big thing.”

He added that the business decisions were being handled by his family. “My sons are handling that — my family is handling it. And I guess they get investments from different people.”

What the World Liberty Financial deal is about

The deal centers on World Liberty Financial (WLFI), a cryptocurrency platform closely linked to the Trump family. According to reporting by the Wall Street Journal, emissaries of Sheikh Tahnoon bin Zayed Al Nahyan, a senior member of the Abu Dhabi royal family, reached an agreement with Eric Trump to purchase a 49% stake in WLFI for $500 million.

The agreement was reportedly finalized four days before Donald Trump was inaugurated as US president last year. The WSJ based its report on internal WLFI documents and comments from people familiar with the matter.

According to Fortune, the investment was not executed directly by Sheikh Tahnoon himself but through two senior lieutenants closely associated with him, both of whom hold leadership roles at G42, an Abu Dhabi-based technology and investment group backed by the royal family. Their involvement further tightens the link between the crypto deal and the UAE’s state-aligned tech and investment ecosystem.

Breakdown of the $500 million investment 

The investment was structured in phases, beginning with an initial payment of $250 million. Of that amount, $187 million was directed to entities linked to the Trump family. According to the report, at least $31 million was earmarked for entities associated with Steve Witkoff, a co-founder of World Liberty Financial who currently serves as the US special envoy to the Middle East.

Another $31 million was allocated to an entity connected to the platform’s other co-founders, Zak Folkman and Chase Herro.

The investment was made through Aryam Investment 1, a company backed by Sheikh Tahnoon, which would become World Liberty Financial’s largest shareholder if the full transaction is completed.

According to Fortune, World Liberty Financial was launched in 2024 as a decentralized finance platform, marking one of the Trump family’s most significant moves into the cryptocurrency space. Before the Abu Dhabi stake purchase, the project had already brought in about $550 million through token sales, highlighting its rapid growth ahead of the equity investment.

Why the deal has drawn wider attention

The transaction has attracted attention not only because of its size and timing, but also because of Sheikh Tahnoon’s broader diplomatic and business relationships with the United States.

The scrutiny has also intensified due to overlapping financial flows within the Trump-linked crypto ecosystem. Fortune notes that World Liberty Financial later launched its own stablecoin, USD1, which gained prominence after MGX, another Abu Dhabi-backed entity, used USD1 to settle a $2 billion investment into Binance. This effectively tied Emirati sovereign capital to a Trump-issued digital currency.

Sheikh Tahnoon is the Chairman of Group 42 Holding Ltd. (G42), an Abu Dhabi-based artificial intelligence company. In December last year, G42 received approval from the US Department of Commerce to purchase advanced AI chips from major American firms, including Nvidia Corp., Advanced Micro Devices Inc., and Cerebras Systems Inc., following discussions with US officials at the White House.

The timing of the crypto investment, the approval of advanced AI chip sales, and the involvement of Sheikh Tahnoon’s close associates have prompted questions about whether diplomacy, access to sensitive technology, and private business interests intersected during the presidential transition.

While no wrongdoing has been alleged, the convergence of these factors has drawn heightened scrutiny because it brings together foreign policy decisions, national-security-linked technology, and a substantial investment in a Trump-linked crypto venture.

Political and regulatory response

The reported deal has also prompted questions from US lawmakers. In January, Democratic Senator Elizabeth Warren urged banking regulators to delay reviewing World Liberty Financial’s application for a bank charter until President Trump divested his interest in the company.

Ethics watchdogs cited by Fortune have warned that such arrangements could revive concerns tied to the Emoluments Clause of the US Constitution, which bars a sitting president from receiving benefits from foreign governments. While no formal violation has been alleged, critics describe the structure and timing of the deal as a textbook example of a potential conflict of interest.

The Office of the Comptroller of the Currency (OCC) later rejected that request, stating that political or personal financial ties would not affect the review process and that WLFI’s application would be evaluated under the same “rigorous review” standards applied to other companies.

Company pushes back on claims

World Liberty Financial has maintained that President Trump had no involvement in the transaction after taking office. Responding to the reports, company spokesman David Wachsman said, “Neither President Trump nor Steve Witkoff had any involvement whatsoever in this transaction and have had no involvement in World Liberty Financial since taking office.”

He also defended the company’s approach to raising capital, adding, “The idea that, when raising capital, a privately-held American company should be held to some unique standard that no other similar company would be held is both ridiculous and un-American.”

What comes next

While no investigation has been announced, the scale of the investment, its timing just before Trump’s inauguration, and the involvement of a foreign royal have ensured continued attention from regulators, lawmakers, and the media.

For now, Trump continues to distance himself from the deal, while the company insists the transaction was conducted independently, as questions around politics, crypto, and global capital remain firmly in focus.

Also Read: Could Kevin Warsh’s Crypto Ties Boost Trump’s Financial Play?

As newly unsealed records released by the U.S. Department of Justice began circulating online, familiar names from politics, finance, and high society once again drew attention in connection with the Jeffrey Epstein case. 

This time, however, online discussion turned toward the crypto sector, after a billionaire linked to digital assets appeared in a decades-old private email included in the DOJ release. 

The reference contains no allegations or criminal claims, but it has been enough to spark curiosity and debate on social media. 

So who is the crypto billionaire whose name has surfaced in the Epstein files? This article looks at the documents and explains who the individual is, and what the records actually show.

Michael J. Saylor, Executive Chairman of Strategy (formerly MicroStrategy) and one of the most visible corporate advocates of Bitcoin, has been referenced in documents released by the United States Department of Justice (DOJ) as part of the latest unsealing of records connected to the late financier Jeffrey Epstein.

The documents, released publicly on January 31, 2026, include a private email dated May 8, 2010. The email was written by Hollywood publicist Peggy Siegal and references a New York charity gala attended by individuals from the film, fashion, finance, and media industries. Michael Saylor is mentioned in relation to a donation made in order to attend the event.

The documents do not make any allegations of criminal wrongdoing against Saylor, nor do they link him to Jeffrey Epstein’s later criminal cases. His mention is limited to a short social interaction described by a third party in private correspondence.

The source of the reference

Saylor’s name appears in a detailed email written by Peggy Siegal, a Hollywood publicist known for arranging high-profile fundraising dinners and managing relationships with wealthy donors and public figures. The email was circulated privately in 2010 and later became part of the materials reviewed and released by U.S. authorities.

In the email, Siegal describes Saylor’s attendance at the event following a $25,000 donation. She wrote: “Michael Saylor giving $25,000 for food and the opportunity to get his name on invite and meet a hip group. Saylor is a complete creep. He has no personality. Sort of like a zombie on a drug.”

She further described her personal experience interacting with him, stating: “I walked him around and he was so weird that even I ran away from him. There is an obvious personal disconnect and I don’t think I can just take his money and deliver a better life because he has no feel for social behavior.”

The remarks in the email represent Siegal’s personal views and social impressions. The correspondence does not include any claims of illegal activity, financial wrongdoing, or behavior connected to Epstein’s criminal actions.

Details of the 2010 charity event

The email refers to a charity gala linked to the Independent Filmmaker Project, hosted at the New York studio of fashion designer Diane von Furstenberg. According to the email, the event was attended by individuals from the entertainment, media, and finance sectors and was organized as a fundraising and networking gathering.

According to the email, Saylor’s involvement was limited to making a donation and attending the event. There is no indication in the released documents that he maintained ongoing contact with Epstein, participated in Epstein’s inner social circle, or engaged in further events tied to Epstein.

No allegations or evidence of wrongdoing

The U.S. Department of Justice (DOJ) has clarified that the unsealed Epstein-related records include a mix of verified documents and uncorroborated third-party statements. The appearance of an individual’s name in the materials does not imply criminal wrongdoing.

In Saylor’s case, the documents contain:

• No allegations of illegal conduct
• No claims of involvement in Epstein’s criminal activity
• No evidence of sustained personal or financial ties to Epstein

Authorities have also confirmed that the Epstein files contain no references to cryptocurrency usage, blockchain transactions, or digital asset wallets associated with Epstein or individuals named in the documents.

Public circulation on X

Following the release of the documents, excerpts from Siegal’s 2010 email circulated widely on X. The material was shared by several high-profile accounts, including the technology-focused account TechFlow (@TechFlowPost).

Online discussion has largely focused on the way the email described Saylor as socially detached, rather than as someone integrated into Epstein’s social network. Many posts pointed to the critical tone of the description to suggest that Saylor did not become part of the elite social circles linked to Epstein at that time.

While opinions online have differed, the underlying source material reflects only a short and unproductive social encounter, as characterized by Siegal.

Contrast with Saylor’s present-day profile

More than a decade after the 2010 event, Michael Saylor is best known for his singular focus on Bitcoin rather than elite social networking.

Under his leadership, Strategy, earlier operating as MicroStrategy Incorporated (MSTR), has accumulated over 700,000 bitcoin (BTC), making it the largest publicly traded corporate holder of the digital asset. 

In public interviews, conference appearances, and posts shared on X, Michael Saylor has described Bitcoin as “digital property,” “a superior form of capital,” and “the apex monetary asset.” 

He has repeatedly spoken about Bitcoin in the context of monetary theory, technology, and capital preservation, and has publicly positioned it as a long-term treasury reserve asset.

Following the release of the Epstein-related documents, online attention has focused on the contrast between how Saylor was portrayed in Peggy Siegal’s 2010 email and his public-facing image today. This contrast has been widely discussed across posts and commentary on X. 

In several public forums, Saylor has stated that he has “no interest in social status games” and that his focus remains on “long-duration capital preservation through Bitcoin.”

The crypto context and what the documents indicate based on public information

Saylor’s name appearing in the Epstein-related files has coincided with his prominence in the global cryptocurrency space. He currently serves as Executive Chairman of Strategy and is frequently referenced in online discussions for his publicly stated views on institutional Bitcoin adoption, corporate treasury allocation, and long-term holding strategies, based on statements he has made publicly over time.

In multiple publicly available statements, Saylor has said that Bitcoin is “not a trade,” “not a hedge,” but “a strategy,” describing it as a long-term balance sheet asset rather than a short-term speculative instrument.

What the documents ultimately establish

The Epstein-related records demonstrate that Epstein maintained contact, direct or indirect, with a wide range of influential figures across finance, technology, politics, and entertainment.

In Michael Saylor’s case, the documentation is limited to a single email describing a one-time social encounter at a charity event. The records show no evidence of continued association, collaboration, or personal relationship beyond that setting.

As with other names appearing in the unsealed materials, Saylor’s inclusion reflects proximity, not implication. The documents provide historical context without making claims or conclusions about wrongdoing.

Also Read: Could Kevin Warsh’s Crypto Ties Boost Trump’s Financial Play?

Crypto markets moved through a week driven mainly by policy decisions and institutional activity rather than price action. Regulators across regions continued to clarify how digital assets will be treated, with Japan signalling a shift toward crypto ETFs and India keeping its existing tax regime unchanged. 

Developments in U.S. politics, corporate treasury moves, and blockchain infrastructure also influenced sentiment during the week.

Below is a recap of the developments that mattered most.

Top Headlines

The week’s biggest developments reflected how policy decisions, regulatory signals, and institutional positioning continue to shape crypto markets, even as price action remained relatively muted.

Trump picks Kevin Warsh for Fed Role, stirring market debate

U.S. President Donald Trump’s backing of Kevin Warsh for a senior Federal Reserve role brought monetary policy back into focus. Warsh, a former Fed governor, has long criticised extended quantitative easing and has raised concerns about the side effects of aggressive central bank intervention.

The development drew attention across financial markets, including crypto. Market participants pointed to Warsh’s views on inflation control, balance sheet management, and asset valuations as factors that could influence liquidity conditions. Any move toward tighter policy is seen as relevant for Bitcoin and other risk assets, especially as institutional participation remains closely linked to macro policy signals.

Tether posts $10B profit as U.S. treasury holdings hit record $141B

Tether reported over $10 billion in profit for 2025, with reserve assets growing to nearly $193 billion. Its U.S. Treasury holdings hit a record $141 billion, making it one of the largest private holders of government debt. The stablecoin now serves more than 530 million users, underlining its dominance as a key liquidity provider in crypto markets.

Japan lays out crypto ETF roadmap for 2028

Japan indicated a possible shift in its approach to digital assets after reports suggested crypto exchange-traded funds (ETFs) could be allowed by 2028. While regulators have not announced any immediate approvals, discussions are reportedly underway to bring Japan’s framework closer to global standards.

The move stands out for a market that has traditionally taken a cautious stance following earlier exchange failures. If implemented, crypto ETFs could allow greater participation from institutional investors, including asset managers and pension-linked funds, though the proposed timeline points to a gradual rollout.

Union Budget 2026 leaves India’s crypto policy unchanged

India’s Union Budget 2026 did not introduce any changes to crypto taxation or regulation. The government retained the 30% tax on crypto gains and the 1% TDS on transactions, with no reference to licensing, classification, or oversight.

For India’s estimated 90 million crypto users, the outcome reinforced concerns around prolonged uncertainty. Industry participants said the lack of movement continues to limit domestic participation and innovation, while encouraging startups, traders, and capital to move offshore.

Strategy Inc. and Bitmine extend corporate accumulation

Corporate accumulation remained active during the week. Strategy Inc. disclosed the purchase of 2,932 Bitcoin for $264 million, bringing its total holdings to 712,647 BTC. The company continues to expand its Bitcoin treasury through periodic purchases.

Bitmine disclosed this week that its Ethereum holdings have climbed to 4.2 million ETH, with a total valuation of about $12.8 billion. The update places the company among the largest known corporate holders of Ether. The disclosure also reinforces the steady interest from institutions treating Ethereum as a long-term balance sheet asset rather than a short-term trade.

Ethereum prepares ERC-8004 mainnet rollout

Ethereum developers confirmed that ERC-8004 is scheduled to go live on the mainnet. The new standard is intended to support AI-driven agents that interact directly with smart contracts and manage assets on-chain.

According to developers, ERC-8004 is aimed at simplifying automated contract interactions across decentralized applications. While usage is still expected to be limited in the early stages, the rollout reflects continued development work linking artificial intelligence tools with Ethereum’s existing infrastructure.

Hyperliquid leads liquidity rankings

Hyperliquid topped global crypto liquidity rankings during the week, moving ahead of several centralized exchanges in reported market depth. The data showed increased activity on the decentralized derivatives platform, pointing to growing trader participation outside traditional centralized venues.

Following the rankings, Hyperliquid’s HYPE token rose about 20%, reflecting increased activity on the platform.

News you might have missed

• Winter Storm Frenan caused a 60% drop in Foundry USA’s mining hashrate as operations were temporarily halted.
• Fake Clawdbot tokens surged amid online speculation before being flagged as scams; the Moltbot founder said he would “never do a coin.”
• Binance shifted $1 billion from its SAFU fund into Bitcoin, adjusting its user protection reserves.
• The U.S. government built cash reserves ahead of a possible shutdown as Trump initiated legal action against his administration.
• The SEC reiterated that tokenized securities fall under the same rules as traditional assets.
• OFAC sanctioned UK-based crypto exchanges over alleged Iran-linked activity.
• The Czech central bank governor reaffirmed support for a Bitcoin pilot.
• Justin Sun claimed trillions could move to Tron in 2026.
• OKX’s CEO criticized Binance over responsibility for the October market crash.
• Silver gained 100% in 50 days, while gold prices declined sharply.
• The U.S. DOJ forfeited $400 million tied to a major cryptocurrency mixer.

What to expect next week

Market sentiment is expected to stay closely tied to macro and political developments, especially around Federal Reserve leadership and ongoing fiscal uncertainty in the U.S. Ethereum developers will be watching the rollout of ERC-8004, while markets across Asia look for more clarity on Japan’s ETF plans. In India, focus remains on whether any regulatory direction emerges following the Union Budget 2026.

Union Budget 2026 has once again passed without any reference to cryptocurrency, extending India’s long-standing silence on crypto regulation. There was no mention of digital assets, no indication of a regulatory framework, and no change to the existing tax structure introduced in 2022.

The 30% tax on crypto gains and the 1% TDS on every transaction continue for the fourth straight year. Since their introduction, these measures were expected to act as interim steps until clearer rules were put in place. Budget 2026 indicates that this transition has yet to occur.

Crypto remains taxed, but not recognised.

Four years since the crypto tax, still no policy framework

When crypto taxation was announced in 2022, the government indicated that regulation would follow. That framework is still missing.

Budget 2026 does not explain how crypto is treated under Indian law. It is still unclear whether it is considered an asset, a security, or a speculative instrument. The budget also does not mention investor protection, exchange licensing, or the place of crypto in the wider financial system.

This continued silence reinforces the impression that crypto is being treated more like gambling than as a financial or technology-based asset.

Industry Reactions

Reacting to the Union Budget 2026, Edul Patel, CEO of Mudrex, said the decision to retain the existing tax framework brings continuity but falls short of industry expectations.

“The Union Budget’s decision to maintain the existing taxation framework for Virtual Digital Assets provides continuity, but the industry was hoping for calibrated reforms to improve market participation and onshore liquidity.”

He added that despite regulatory and tax hurdles, the sector continues to expand, and targeted reforms could have strengthened India’s global position.

“While the sector continues to grow despite regulatory and tax challenges, the rationalisation of transaction taxes and enabling loss offsets would have further strengthened India’s competitiveness in the global digital asset economy.”

Patel noted that the industry remains hopeful that ongoing engagement with policymakers will lead to a more supportive environment.

“We remain optimistic that continued dialogue between industry and policymakers will help shape a more growth-oriented framework going forward.”

— Edul Patel, CEO, Mudrex

Meanwhile, Ashish Singhal, Co-founder of CoinSwitch, welcomed the introduction of explicit penalty provisions, calling them a step forward for compliance in the crypto ecosystem.

“The introduction of specific penalty provisions is a positive milestone for the crypto industry. By mandating a ₹200 daily penalty for reporting delays and a ₹50,000 fine for inaccuracies, the Government has formalized high standards of tax compliance and reporting for both users and VASPs.”

He said these measures validate the compliance-first approach followed by Indian platforms.

“This validates the ‘Compliance-First’ model of Indian platforms like CoinSwitch, shielding users from reporting risks and aligning with compliance goals.”

However, Singhal cautioned that compliance alone would not be enough to drive sustainable growth in the sector.

“While compliance and surveillance have tightened, true growth requires economic rationalization to keep Web3 innovation and talent within India.”

He pointed to existing tax provisions as barriers to genuine participation.

“The 1% TDS, lack of offset of losses and the 30% flat capital gains rate create an asymmetric environment for genuine participation.”

According to Singhal, such measures could push users toward offshore platforms.

“These measures risk driving Indian capital toward non-compliant offshore platforms, leaving users vulnerable to legal and financial scrutiny.”

He reiterated CoinSwitch’s commitment to working with policymakers on reforms.

“CoinSwitch remains fully committed and we will continue to work with the Government towards a balanced, user-first tax regime that pairs robust oversight with economic viability.”

— Ashish Singhal, Co-founder, CoinSwitch

In a separate remark, Edul Patel said the proposed penalties signal a broader policy push towards transparency and accountability.

“The proposed penalties for non-disclosure and misreporting of crypto assets reflect a broader policy shift towards strengthening compliance and transparency in India’s digital asset ecosystem, building on the recently updated FIU-IND guidelines for exchanges.”

He added that clearer accountability helps align crypto with mainstream financial standards.

“By creating clearer accountability, these measures bring crypto transactions closer to mainstream financial reporting standards.”

Patel concluded that long-term growth would depend on trust and regulatory clarity.

— Edul Patel, CEO, Mudrex

“Long-term growth in the sector depends not only on innovation, but also on trust, consistency, and regulatory clarity, and measures like these move the industry in the right direction.”

Commenting on the Budget, SB Seker, Head of APAC at Binance, said the Union Budget 2026:

“reiterates India’s focus on building the foundations of a Viksit Bharat, with continued emphasis on digital public infrastructure such as AI, data centres, and cloud-led growth.

“From a digital assets perspective, the Budget maintains the existing taxation framework. At the same time, it underlines the need for a more forward-looking tax approach that evolves with market maturity, technological convergence, and India’s broader digital ambitions.

“Globally, governments are moving towards clearer and more calibrated tax and compliance frameworks for digital assets. Binance believes that globally aligned tax policies, combined with strong compliance standards and investor education, can support sustainable long-term growth.”

India leads global crypto adoption despite policy silence

India remains a global leader in crypto adoption, with more than 90 million users as of 2024. The country has the largest crypto user base in the world, mainly driven by retail investors, a young population, and widespread access to mobile trading apps.

In November 2025, India became the world’s second-largest holder of Bitcoin, with retail investors holding nearly $120 billion worth of the asset. This placed the country just behind the United States in terms of retail Bitcoin holdings.

Despite the scale of adoption and capital involved, crypto does not find any mention in the country’s most important fiscal policy document.

Crackdowns increase even as regulation remains absent

Even as crypto remains outside budget discussions, regulatory action around the sector has picked up.

Earlier this year, the Financial Intelligence Unit (FIU) tightened the screws on crypto platforms by pushing stricter KYC compliance norms. Exchanges were asked to strengthen verification and reporting processes, adding regulatory pressure without offering legal clarity.

From April 2026, authorities will also be able to track crypto-related emails and social media activity, expanding oversight of digital asset discussions and transactions.

The focus, for now, appears to be on monitoring and enforcement rather than putting a formal regulatory framework in place.

Stablecoin signals and digital rupee add to confusion

The silence in Budget 2026 stands in contrast to recent government statements on digital assets.

In October, Finance Minister Nirmala Sitharaman urged nations to prepare for stablecoins, recognising their growing role in global finance and cross-border payments. Around the same period, the government reiterated its plans to expand the RBI-backed digital currency.

But Union Budget 2026 stays silent on where private cryptocurrencies fit into this wider plan. There is still no clarity on whether India intends to introduce a sovereign stablecoin or how it would work alongside crypto assets already used by millions of Indians.

Taxed, tracked but still ignored

The continued exclusion of crypto from the Union Budget 2026 reflects the gap between how widely crypto is used in India and how it is dealt with at the policy level.

Crypto in India continues to be heavily taxed and closely monitored, but it still functions without a clear regulatory framework. With millions of users and substantial retail money already involved, the lack of direction raises a basic question: how long can the government continue to delay taking a clear policy call?

As the Union Budget 2026 ends without addressing crypto once again, that question remains unanswered. Why does a country that leads global crypto adoption continue to avoid spelling out crypto’s place in its financial system?

In a move that has sent shockwaves through Wall Street and the crypto world, the U.S. President Donald Trump nominated Kevin Warsh to succeed Jerome Powell as Chair of the Federal Reserve on January 30, 2026.

This was not a routine leadership change at the world’s most powerful central bank. It marked a sharp philosophical turn at a moment when interest rates, digital assets, and the global role of the U.S. dollar are colliding in ways not seen since the end of the Bretton Woods system. 

Trump’s choice of Warsh signals a deliberate shift away from the Powell-era Federal Reserve, which treated crypto largely as a speculative side effect of excess liquidity, toward a leadership that views digital assets as a direct response to monetary policy itself.

But why Warsh? What is the nature of his long and largely unexamined relationship with crypto? And is there more at stake than monetary theory, including potential alignment with Trump’s own financial and political interests in digital assets?

This article examines angles rarely discussed in mainstream coverage: Warsh’s direct advisory roles in crypto firms like Bitwise and Electric Capital, his early investment in algorithmic money experiments, the clash between Powell’s dollar-first orthodoxy and Warsh’s “Bitcoin as discipline” thesis, and the increasingly blurred boundary between public policy and private gain. 

It also explores controversial peripheral issues, including Warsh’s appearance in recently released Epstein-related documents, not as an accusation but as a window into elite financial networks that quietly shape power.

Everything you need to know about Kevin Warsh: Trump’s pick to lead the Federal Reserve

Kevin Warsh is no outsider to the Federal Reserve. He rose rapidly through finance and policy circles, becoming one of the youngest Fed Governors in history when President George W. Bush appointed him in 2006. He served until 2011 and played a central role during the 2008 global financial crisis, a period that continues to define debates over central bank authority.

During that crisis, Warsh was deeply involved in designing emergency lending programs aimed at stabilizing frozen credit markets. He worked closely with the Treasury Department on initiatives that intersected with the Troubled Asset Relief Program, collaborating with figures such as Neel Kashkari, now President of the Minneapolis Federal Reserve. Those measures helped avert systemic collapse, but they also left Warsh uneasy about the long-term consequences of extraordinary intervention.

As the crisis faded, Warsh emerged as one of the earliest and most vocal internal critics of the Fed’s post-crisis policy direction. He warned that prolonged near-zero interest rates and large-scale asset purchases would distort asset prices, inflate speculative behavior, and weaken confidence in the dollar. His vote against the second round of quantitative easing in 2010 cemented his reputation as a monetary hawk who prioritized price stability over market support.

After leaving the Fed, Warsh joined Morgan Stanley and later became a distinguished visiting fellow at Stanford’s Hoover Institution. He also married Jane Lauder, heir to the Estée Lauder fortune, embedding him within elite Republican donor and financial networks. To Trump, this combination of polish, pedigree, and ideological clarity made Warsh “central casting” for the role.

Trump announced the nomination on Truth Social, praising Warsh as a “GREAT Fed Chairman” who would reverse what he described as Jerome Powell’s “stubborn” and growth-suppressing policies. The timing mattered. The announcement came amid renewed volatility in crypto markets, with Bitcoin sliding to around $82,800, down roughly 7% on the week, as traders reassessed the future path of interest rates.

Why did Trump remove Jerome Powell? 

Trump’s decision not to reappoint Powell, whose term as Chair ends in May 2026, though his Board seat runs until 2028, was driven by a convergence of personal, ideological, and strategic conflicts.

Interest rates and the crypto liquidity war

At the center was the interest rate. Under Powell, the Federal Reserve raised rates aggressively to combat inflation and then held them at restrictive levels longer than markets expected. 

By late 2025 and early 2026, rates remained in the 3.5% to 3.75% range. Powell argued that easing too soon would risk inflation’s return and undermine the Fed’s credibility.

Trump saw it differently. High rates increased the cost of servicing a $38 trillion national debt, suppressed asset prices, and drained liquidity from risk markets, including crypto. Trump repeatedly compared the Fed unfavorably with the European Central Bank, which had already begun cutting rates, and publicly labeled Powell “Mr. Too Late.”

The Fed renovation fight

Tensions escalated in late 2025 when Trump-aligned officials launched a public and legal offensive against Powell over a $2.5 billion renovation of the Fed’s headquarters. 

The Justice Department opened an investigation into whether Powell had misled Congress about cost overruns. Powell denied wrongdoing and characterized the probe as political pressure aimed at forcing rate cuts.

To Trump allies, the renovation symbolized an insulated and unaccountable central bank. To Powell, it was a red herring. The conflict made reconciliation impossible.

Ideology and the “Woke Fed”

Trump also accused Powell of allowing the Fed to drift into non-core issues, including climate risk analysis and diversity initiatives in banking supervision. Powell defended these efforts as risk management. Warsh publicly disagreed, arguing in interviews that the Fed should narrow its mandate and focus exclusively on monetary discipline.

Removing Powell was not just retaliation. It cleared the path for a Federal Reserve aligned with Trump’s broader economic vision, including a more permissive stance toward crypto.

Why Trump chose Kevin Warsh: The strategic calculation

Warsh offered Trump something Powell never would: intellectual alignment without institutional rebellion. As a former Fed Governor and Wall Street insider, Warsh carried establishment credibility. Yet unlike Powell, he openly acknowledged crypto as a consequence of monetary policy rather than a fringe distraction.

Trump saw Warsh as a bridge. A figure who could reassure markets about inflation while understanding why Bitcoin exists at all.

The hidden crypto connection: What Warsh has actually done

Warsh’s crypto ties are not speculative. They are documented.

He served as an advisor to Bitwise Asset Management, one of the largest crypto index fund managers, whose business depends on institutional adoption and regulatory clarity, as per chatter on X. 

He also advised Electric Capital, a venture firm focused almost exclusively on blockchain and crypto-native companies whose valuations are directly influenced by interest rates, banking access, and regulatory interpretation.

Most significantly, Warsh was an early investor in Basis, an algorithmic stablecoin project that sought to create a decentralized, rules-based monetary system capable of expanding and contracting supply without human discretion. 

While Basis ultimately shut down under regulatory pressure, its ambition mirrored Warsh’s long-standing critique of discretionary central banking.

These experiences informed Warsh’s public views. He has described Bitcoin as “digital gold” and as a “policeman” on central banks. In his framework, Bitcoin does not threaten the dollar directly. It exposes policy failure. When central banks keep rates artificially low for too long or blow up their balance sheets, Bitcoin turns into the escape hatch. Not because it’s trendy, but because people start looking for an exit from monetary excess.

Powell vs Warsh vs Trump on crypto and the dollar

Jerome Powell has always treated crypto as something on the sidelines. To him, it’s speculative, volatile, and full of consumer risk. His focus stayed firmly on protecting the dollar and preserving financial stability. 

Under Powell, banks became more cautious about touching crypto, stablecoins were put under a microscope, and Bitcoin was never acknowledged as anything close to a serious monetary alternative.

Donald Trump’s view is very different and far more strategic. He frames crypto through the lens of power and sovereignty. He’s openly hostile to CBDCs, but supportive of private-sector innovation, Bitcoin holdings, and the idea that the U.S. should lead the digital finance race. For Trump, crypto isn’t just an asset — it’s a geopolitical tool to reinforce American dominance in the next financial era.

Warsh sits between them. He does not advocate loose money or crypto evangelism. But he acknowledges that crypto exists because monetary policy matters, and that ignoring it weakens, rather than strengthens, the dollar’s credibility.

The upsides and risks for crypto

Warsh could legitimize crypto by acknowledging its role in modern finance and supporting wholesale digital dollar infrastructure. At the same time, his hawkish stance on inflation, balance sheets, and stablecoin regulation could restrain speculative excess and suppress short-term rallies.

Markets recognize the contradiction. Bitcoin often sells off after Fed announcements, even during cutting cycles, reflecting disappointment rather than relief. Warsh’s presence amplifies that uncertainty.

Power, Proximity, and Perception

Trump’s own crypto-linked ventures, including World Liberty Financial (WLFI), stand to benefit from lower rates and regulatory clarity. Warsh’s past advisory roles have raised inevitable questions about conflicts of interest, even if he adheres to all recusal requirements.

Separately, his name appeared in recently released Epstein-related documents, tied to a social reference from 2010. No wrongdoing has been alleged, but the mention added to public scrutiny and served as a reminder of how elite social and professional circles often intersect away from public view.

Conclusion: The great convergence of power and crypto

The nomination of Kevin Warsh marks a turning point. For the first time, a prospective Fed Chair has not only studied crypto but also participated in its financial and ideological development. Trump’s decision reflects a belief that the future of money cannot be separated from politics, power, or technology.

Whether this convergence strengthens the dollar or blurs the boundary between public policy and private interest will depend on what comes next. What is already clear is that crypto is no longer outside the Federal Reserve’s walls. It has entered through the career of the man now poised to lead it.

Also Read: Why Trump Pardoned the Crypto Industry but Left SBF to Rot

Disclaimer: This article is an opinion piece and reflects the author’s personal analysis and interpretation of publicly available information and reporting. The Crypto Times does not intend to allege, imply, or assert any wrongdoing or make factual claims beyond what has been reported by credible public sources. All views expressed are based on information available online at the time of writing and are presented solely for commentary and discussion purposes.

The U.S. President Donald Trump has nominated former Federal Reserve governor Kevin Warsh as the next Chair of the Federal Reserve, ending weeks of speculation over who would replace Jerome Powell when his term expires in May.

The announcement was made on Friday, with Trump saying on his Truth Social platform that Warsh would be “one of the great Fed chairmen” and praising his understanding of the economy and interest rate policy.

Financial markets reacted cautiously. The US dollar trimmed early gains, Treasury yields moved slightly higher, and stock futures pointed to a softer open on Wall Street.

Markets react with caution

Investors showed little sign of panic following the announcement, largely because Warsh had been widely tipped as a frontrunner in recent weeks.

US two-year Treasury yields rose modestly before easing, while longer-dated yields were little changed. The USD initially strengthened but later gave up gains as traders assessed what the appointment could mean for future rate decisions.

Market participants said the muted reaction reflected uncertainty over how Warsh would act once in office, especially given the Federal Reserve’s committee-based decision-making structure.

Why Trump picked Warsh

Warsh served as a Federal Reserve governor from 2006 to 2011 and played a role in policy decisions during the global financial crisis. Since then, he has been a frequent critic of the Fed’s large balance sheet and long period of ultra-loose monetary policy.

Trump has repeatedly criticized the central bank for keeping interest rates too high and slowing economic growth. Warsh has recently echoed similar views, saying the Fed has been slow to adjust policy as inflation pressures ease.

In December, Trump publicly said that Warsh believed rates should be lower, a comment that signalled his growing support for the former Fed official.

Unlike some other names linked to the role, Warsh is seen as having both policy experience and credibility in financial markets, reducing fears of a politically driven appointment.

What it means for crypto markets

Crypto traders are keeping a close eye on the nomination, even though it’s not expected to have an immediate impact on the market.

Warsh has long been critical of extended easy-money policies and has warned that too much liquidity tends to inflate asset bubbles. That view isn’t especially friendly for crypto, which has historically done best when monetary conditions are loose and liquidity is flowing freely.

However, his more recent comments suggest a softer tone. Warsh has acknowledged slowing inflation and has indicated that rate cuts may be appropriate if economic growth weakens.

For crypto markets, the picture is mixed. On one hand, lower interest rates usually help assets like Bitcoin by improving liquidity and risk appetite. On the other, Warsh’s long-held view that the Fed should shrink its balance sheet could cap any major upside.

For now, traders are paying far more attention to inflation numbers and signals on when rate cuts might begin, rather than the Fed chair appointment itself.

Background on Warsh

Warsh previously served as a senior economic adviser in the George W. Bush administration and represented the Federal Reserve at G20 meetings. He is currently a lecturer at Stanford’s Graduate School of Business and has ties to several major investment firms.

He is married to Jane Lauder, granddaughter of the iconic fashion businesswoman Estée Lauder, and has longstanding connections across Wall Street and Washington.

Warsh’s nomination now heads to the U.S. Senate for confirmation. If approved, he will take over the central bank at a time when markets are increasingly sensitive to signals around interest rates, inflation, and liquidity conditions.

Also Read: Why Trump is Taking His Own Government to the Court

In a dramatic legal move, pro-crypto U.S. President Donald Trump, along with his sons Donald Trump Jr. and Eric Trump and the Trump Organization, filed a $10 billion lawsuit against the Internal Revenue Service (IRS) and the U.S. Treasury Department. 

The lawsuit, filed Thursday in Miami federal court, claims the agencies failed to prevent the leak of Trump’s tax records, exposing private financial information to the media during his first term.

This is not an ordinary lawsuit. It is very unusual for a sitting president to take legal action against his own administration, and the case is already making headlines across the country. It raises serious questions about how the government protects taxpayers’ private information and how politics can mix with the legal system.

The heart of the lawsuit: Reputational and financial damage

Trump’s legal team says the leak caused serious harm, resulting in “reputational and financial harm, public embarrassment, unfairly tarnished their business reputations, portrayed them in a false light, and negatively affected President Trump, and the other Plaintiffs’ public standing.”

The complaint specifically points to former IRS contractor Charles “Chaz” Littlejohn, who admitted in a 2024 deposition that he provided Trump’s tax records to the investigative news outlet ProPublica, as per CNBC. Littlejohn also provided documents to The New York Times, which reported on Trump’s minimal federal tax payments in certain years, a story that sparked national headlines.

Trump’s legal team claims that ProPublica’s reporting falsely suggested that the returns contained “versions of fraud,” a statement Trump says misrepresented the financial records of him and his businesses.

Charles Littlejohn and Booz Allen Hamilton: A data breach fallout

Littlejohn, 40, pleaded guilty in 2023 to one count of disclosure of tax return information and is now serving a five-year prison sentence. Beyond Trump’s documents, Littlejohn admitted to stealing and leaking records of thousands of other wealthy individuals, including billionaires Jeff Bezos and Elon Musk.

The Treasury Department responded by canceling all contracts with Booz Allen Hamilton, the consulting firm employing Littlejohn. Treasury Secretary Scott Bessent said, “Booz Allen failed to implement adequate safeguards to protect sensitive data, including the confidential taxpayer information it had access to through its contracts with the Internal Revenue Service.”

The IRS, meanwhile, called Littlejohn’s actions “unacceptable” and said it has taken “substantial investments in data security to strengthen its safeguarding of taxpayer information.”

Trump’s pattern of high-value lawsuits

This $10 billion lawsuit is not Trump’s first move of this kind. In October 2025, he sought $230 million from the Department of Justice (DOJ), claiming the agency had improperly investigated him. 

Trump told reporters, “They probably owe me a lot of money, but if I get money from our country, I’ll do something nice with it, like give it to charity or give it to the White House.”

Trump has also filed similar multi-billion-dollar lawsuits against major media outlets, including:

• BBC: $10 billion defamation suit over edits to a January 6, 2021, speech clip.
• The Wall Street Journal (WSJ): $10 billion suit over reporting on an alleged crude drawing sent to Jeffrey Epstein in 2003.

Both media companies vowed to fight the lawsuits.

Historical context: IRS leaks and other victims

Trump is not the first high-profile figure affected by IRS leaks. In 2024, hedge fund billionaire Ken Griffin sued the IRS after Littlejohn leaked his tax records. Griffin later dropped his lawsuit after the IRS strengthened its data security measures.

Legal experts say Trump’s case is unusual and complicated. It raises questions about how much responsibility the government bears when a contractor mishandles sensitive information, the privacy of taxpayers, and the potential conflicts when a sitting president takes legal action against federal agencies.

Crypto angle: Why the lawsuit hits even closer to home

This lawsuit takes on an added layer because of Trump’s growing involvement in the cryptocurrency world.

Trump’s embrace of crypto began with his NFT projects, selling digital trading cards of himself that quickly drew strong interest. At events like the Bitcoin 2024 conference, he spoke about supporting Bitcoin and digital assets, pledging to champion the industry and overhaul federal regulation.

As president, Trump has become a major player in crypto, earning substantial sums through non-fungible tokens (NFTs), memecoins, and his own digital token ventures, including the Trump-branded coin ($TRUMP) and projects under World Liberty Financial. 

According to Bloomberg, digital assets added roughly $1.4 billion to the Trump family’s net worth over the past year, now making up about one-fifth of their estimated $6.8 billion fortune. 

Separately, financial disclosures show that Trump personally earned at least $57.7 million from token sales tied to World Liberty Financial, while additional crypto venture proceeds over recent months brought in hundreds of millions more.

Experts note that if his crypto income were ever examined alongside the leaked tax returns, it could show not only past tax behavior but also the scale of his digital asset earnings and what taxes have been paid. For Trump, the issue is about more than just reputation—it now involves a multi-million-dollar crypto empire.

This leads many observers to ask: Why is Trump pushing so hard against the leaked tax returns when his crypto earnings alone are far larger than the amounts at issue? The likely answer is control—he wants to prevent scrutiny of his entire financial picture, both traditional businesses and newer digital ventures.

Political and legal implications

By filing this lawsuit, Trump is in a rare position. He is challenging agencies that are part of his own administration while asking for one of the largest financial settlements ever. 

Even if the case doesn’t succeed, analysts say it is likely to attract huge public attention and could ignite wider discussions about government data security, oversight of the IRS, and the limits of presidential authority in civil matters.

With the case now filed, all eyes are on the Miami federal court. The White House and the Trump Organization have not commented on the potential use of the $10 billion if awarded. Meanwhile, the case adds yet another chapter to the president’s complex relationship with the federal government.

Also Read: Why Trump Pardoned the Crypto Industry but Left SBF to Rot

Disclaimer: The Crypto Times is not making any claims about President Trump’s financial holdings. References to crypto assets, NFTs, or digital earnings in this article are based solely on publicly available news reports and media coverage, and should be considered context or speculation rather than verified fact.

Ethereum (ETH), the world’s second-largest cryptocurrency, began the day around $2,738 but quickly lost momentum, slipping below the crucial $2,700 mark and touching nearly $2,680. The drop caught traders off guard and pushed ETH into one of its sharpest declines in recent weeks, down nearly 7% in the last 24 hours.

At the time of writing, ETH is hovering around $2,715–$2,720, a level that now feels like a make-or-break zone. All eyes are on whether the price can stabilize here — or if the selling pressure will drag it even lower.

Ethereum’s trading range

Since November 14, 2025, Ethereum has been moving in a range between $2,737 and $3,410. This means the price has been mostly sideways for over two months. The upper limit, $3,410, acts as resistance.

The lower limit, around $2,700, shows support, where buyers usually step in to prevent the price from falling further.

Because of this range, the market has been quiet in terms of trends. Neither buyers nor sellers have been able to take control. The move today shows how fast things can change if pressure builds on the market.

Liquidations and market activity

Ethereum’s recent drop triggered a lot of forced position closures. In the last 24 hours, roughly $414 million worth of ETH trades were liquidated, as per data by Coinglass. 

Most of this — about $387.88 million — came from traders who had bet on the price going up, while $26.52 million came from those betting it would fall. When these positions get closed automatically, it adds more selling pressure, and the price drops faster.

Ethereum’s 24-hour trading volume also shot up to $44.34 billion, almost 90% higher than yesterday. Traders were moving quickly, buying and selling as the price changed, and that kept the downward pressure going.

ETF outflows add more pressure on ETH

Ethereum’s weakness wasn’t limited to futures and leveraged traders. Spot ETF data also showed clear signs of caution from institutional investors.

On January 29, U.S. spot Ethereum ETFs recorded a net outflow of $155.61 million, as per SosoValue, suggesting that big players were reducing exposure as prices slipped.

Some of the largest funds saw notable withdrawals:

• BlackRock’s ETHA recorded outflows of $54.88 million
• Fidelity’s FETH saw $59.19 million leave the fund
• Grayscale’s ETHE lost $13.05 million, while its lower-fee ETH fund saw another $26.49 million in outflows
• Even smaller ETFs like Bitwise’s ETHW saw money move out

Despite this, total assets held across Ethereum spot ETFs remain sizable at $16.75 billion, accounting for nearly 5% of Ethereum’s total market value. The big outflow in just one day shows that investors are starting to step back as Ethereum’s price weakens. 

Market confidence has clearly cooled off, with many choosing to stay on the sidelines instead of taking fresh bets.

At the same time, trading picked up sharply. ETF volumes jumped to $2.15 billion as investors moved quickly to adjust their positions after ETH slipped below key support levels.

Taken together, the ETF data adds to the growing bearish tone in the market — suggesting that it’s not just short-term traders pulling back, but institutional investors as well, who are choosing to stay on the sidelines as uncertainty builds.

Options expiry adds pressure

Ethereum’s drop today was partly due to a $1.4 billion options expiry. Large expiries often make the market more active because traders and institutions adjust their positions to protect themselves. This can push the price up or down quickly.

Today, it added to the selling pressure and helped ETH fall below $2,700. Traders pay close attention to these expiry dates since they can trigger sudden moves.

What could happen next

Ethereum is at a tricky point right now. If it can hold the $2,700 support, it might keep trading sideways within its usual range and try to climb back toward the resistance at $3,410. But if selling pressure keeps building, or if any negative news hits the market, ETH could break support and head toward $2,094, which would be a bigger drop.

The market is playing it safe right now. Ethereum has been stuck between $2,737 and $3,410 for the past two months, and today’s big drop shows that the price is still swinging a lot. Traders and investors will be watching closely over the next few days to see if Ethereum can settle down or if it will fall even more.

Also Read: Silver Outshines Bitcoin with 100% Gain in 50 Days — Is Risk Appetite Changing?

Crypto markets saw heavy selling over the past 24 hours as traders tried to cut their risk, while silver surged to record highs, highlighting a shift in investor sentiment.

According to CoinGlass, more than $346 million in crypto positions were liquidated during this period, affecting over 120,000 traders. The largest single liquidation was a Bitcoin trade on Hyperliquid worth $31.64 million.

This wave of selling pushed Bitcoin further down, continuing its recent decline.

Bitcoin slips amid liquidations

At the time of writing, Bitcoin was trading near $87,800, down around 1.7% in the last 24 hours. Over the past week, the world’s largest cryptocurrency has slipped more than 2%, as leveraged bets were unwound and traders turned cautious.

Data showed that $135.83 million worth of Bitcoin positions were liquidated in a day, with the majority coming from long trades. This suggested that many traders were caught on the wrong side of the move after betting on a rebound.

Ethereum under pressure

The second-largest cryptocurrency also moved lower. Ethereum fell to around $2,940, losing more than 2.5% on the day, as per CoinMarketCap data. 

Nearly $52 million in ETH positions were liquidated, most of them longs. The fall accelerated after Ethereum slipped below the $3,000 mark, a level closely watched by traders.

Silver hits record high as crypto struggles

While crypto struggled, precious metals moved in the opposite direction.

Silver shot up to a record $120 per ounce before pulling back a little to about $119.26, as per TradingView data. In India, it climbed to around ₹4,10,000–₹4,25,000 per kilogram, showing strong demand for the physical metal. Gold also went up sharply, reaching $5,516 per ounce, as investors looked for safer places to put their money.

Economist and Bitcoin critic Peter Schiff reacted to the metals rally on social media, posting: “In 2017, at its peak of nearly $20k, Bitcoin was worth 14.25 ounces of gold. Today it’s worth 16 ounces. That’s a 12% gain in nine years. Was it worth the risk to beat gold by just 1.3% per year? HODLers will find out the hard way as Bitcoin crashes and gold continues to soar.” His comment highlights concerns about crypto, with many investors turning to precious metals for safety.

Global uncertainty fuels safe-haven demand

The rally in metals comes at a time of rising global uncertainty. Markets reacted after U.S. President Donald Trump warned of possible 100% tariffs on Canada if it moved ahead with trade deals involving China. The comments revived fears of trade tensions and pushed investors toward traditional safe havens.

Demand for physical silver has been especially strong in China and India. Market participants say buying of silver bars has increased sharply in recent weeks, tightening supply and pushing prices higher.

Fed policy and market caution

Uncertainty around U.S. monetary policy continues to weigh on markets. The Federal Reserve voted 10–2 to keep interest rates unchanged, pushing back against pressure for immediate cuts. Officials said inflation remains sticky and they want clearer signs before easing policy. The decision has added to investor caution, with many staying away from riskier assets like crypto.

Recent data showed the U.S. unemployment rate fell to 4.4% in December despite weak job growth, and economists expect the Personal Consumption Expenditures Price Index, excluding food and energy, to rise 3% year-over-year for the month, well above the Fed’s 2% target. 

Inflation remains higher than desired, and the latest jobs data leaves little room for quick policy easing. Because of this, investors are being careful and staying away from riskier assets like crypto.

Indian markets stay steady

Indian markets remained steady through the session. The Sensex rose nearly 500 points to close above ₹82,300, while the Nifty gained over 160 points. Investors remained cautious ahead of the Economic Survey and the Union Budget 2026, which are expected to set the direction for markets.

Early signals pointed to a soft start in the next session. Gift Nifty was trading around 25,364, nearly 86 points lower than the previous Nifty futures close, indicating a slightly negative opening. The weakness reflected mixed global cues rather than any domestic concern.

Asian markets showed mixed trends following the US Federal Reserve’s policy decision.

• Japan’s Nikkei: up 0.18%
• Topix: down 0.57%
• South Korea’s Kospi: up 1.09%
• Kosdaq: up 2.69%
• Hang Seng futures indicated a lower open

In the U.S., Wall Street closed mostly higher after the Fed kept interest rates unchanged.

• Dow Jones: up 12.19 points to $49,015.60
• S&P 500: down 0.01% to $6,978.03
• Nasdaq Composite: up 40.35 points to $23,857.45

The S&P 500 briefly crossed the $7,000 mark, showing resilience despite caution around future rate cuts.

Overall, mixed global signals suggest Indian markets may open cautiously, with stock-specific movement likely to drive trading.

Why Bitcoin is falling while silver rises

It’s an old question, but worth asking again: why is Bitcoin going down while silver is climbing?

Traders say it’s all about how risky investors feel things are. When times feel uncertain, people move their money to things that feel safer, like gold and silver. Bitcoin is often called digital gold, but in the short term, it still acts like a risky investment, especially when people are using leverage.

In the past, Bitcoin has sometimes fallen behind gold and silver before bouncing back once things settle down. Whether that happens this time, we’ll have to wait and see. For now, it’s clear that investors are playing it safe, volatility is up, and people are choosing security over big bets.

Also Read: Crypto Trader Makes $2M in 24 Hours on Hyperliquid Amid HYPE Rally

Sygnum, a Swiss digital asset bank, and Starboard Digital, a crypto investment firm, have raised over 750 Bitcoin (BTC) for a new fund that focuses on arbitrage trading, as institutional investors look for ways to earn returns from crypto without relying only on price increases.

The fund, called the BTC Alpha Fund, was launched in October 2025 and has drawn capital from professional and institutional investors over the past four months. According to figures shared by the firms, it delivered an annualized return of 8.9% in Bitcoin terms during the fourth quarter of 2025.

📣 News: Sygnum and Starboard Digital raise over 750 BTC for BTC Alpha Fund

▪️ Over 750 BTC raised from professional investors in first four months, validating institutional demand for yield-generating Bitcoin strategies
▪️ First regulated bank globally to offer market-neutral… pic.twitter.com/1PTHym83RW

— Sygnum Bank (@sygnumofficial) January 29, 2026

Instead of betting on whether Bitcoin’s price will go up, the fund follows market-neutral strategies. It focuses on exploiting price differences across crypto markets, especially between spot and derivatives, making profits from these gaps rather than from changes in BTC’s price.

Shift in institutional approach

The fund is launching at a time when institutional interest in digital assets is shifting. With spot Bitcoin exchange-traded funds (ETFs) making it easier for big investors to get exposure, and price volatility lower than in earlier cycles, simple long-only strategies are becoming less appealing. 

Because of this, some investors are now looking at approaches similar to traditional hedge funds, such as market-neutral and relative-value strategies, which aim to generate returns under a variety of market conditions.

Sygnum provides the banking and custody infrastructure for the fund, while Starboard Digital is responsible for managing the trading strategy.

Markus Hämmerli, who leads the BTC Alpha Fund at Sygnum, said the product was developed in response to this shift in investor behavior.

“As Bitcoin becomes a core portfolio allocation for institutional investors, we’re seeing growing demand for strategies that can generate returns beyond simple price appreciation. The fund’s Q4 performance demonstrates that professional Bitcoin management can deliver meaningful results even when spot markets are flat or declining.”

How the strategy works

The BTC Alpha Fund is domiciled in the Cayman Islands and uses systematic arbitrage strategies across major crypto trading venues. These include price differences between spot and derivatives markets, as well as short-term inefficiencies that arise across exchanges.

The fund does not bet on whether Bitcoin’s price will go up or down. It is designed to stay market-neutral, earning returns mainly through trading activity that does not depend on overall market movements. Any profits are added back into Bitcoin rather than being converted to fiat.

To manage risk, the fund uses position limits, liquidity checks, and focuses on markets with high trading volumes. It offers monthly liquidity to investors and keeps its assets stored off-exchange.

Role of Sygnum and Starboard

Sygnum acts as the banking and infrastructure provider, offering custody and financing services linked to the fund. Starboard Digital manages execution and portfolio construction.

One feature of the structure is that fund units can be used as collateral for US dollar–denominated Lombard loans through Sygnum, allowing investors to access liquidity without selling their Bitcoin exposure.

Nikolas Skarlatos of Starboard Digital said the fund was built to address a long-standing challenge in institutional crypto investing. “Generating yield on Bitcoin while maintaining exposure to its long-term upside has been a persistent challenge for institutional investors. The early performance of the fund points to growing acceptance of yield-focused strategies, with a target range of 8–10% annual returns across different market conditions.”

Broader market context

The fund is launching at a time when crypto markets are growing more mature, with deeper liquidity and stronger infrastructure that make more complex investment strategies possible. 

At the same time, arbitrage strategies depend on gaps in the market, which can narrow as more money flows in. How well the fund performs also depends on execution, the depth of the markets it trades in, and how risks are handled during volatile periods. Data from the industry suggests that demand for professionally managed Bitcoin products is growing. Around 68% of institutional investors have either already invested in, or plan to invest in, Bitcoin exchange-traded products (ETPs) or related instruments, reflecting the growing appetite for structured crypto strategies beyond simple spot exposure.

Even so, the scale of capital raised in a relatively short period suggests that institutional investors are becoming more comfortable allocating to structured crypto products that go beyond simple price exposure.

Also Read: ABTC Expands Treasury To 5,843 BTC As Corporate Buying Ramps Up

When the Union Budget for 2026–27 is presented in Parliament by Finance Minister Nirmala Sitharaman on February 1, 2026, it will arrive at a moment of quiet consequence for India’s digital economy. 

Over the last decade, India has quietly built one of the world’s most advanced public digital backbones, from real-time payments and digital identity systems to large-scale financial inclusion infrastructure that reaches hundreds of millions of people. 

In parallel, the country has also emerged as a major source of blockchain talent, fintech founders, and engineers working at the cutting edge of global crypto and Web3 development.

And yet, despite these structural advantages, India today finds itself drifting toward the margins of the global digital asset economy rather than shaping its direction.

This gap sits at the centre of the policy challenge now confronting the government. The question is no longer whether cryptocurrencies or blockchain-based systems belong in India’s financial future. Market behavior, international adoption, and domestic participation have already answered that. 

What remains unresolved is how India chooses to engage with this reality—and on what terms. The real question is whether India intends to shape this sector strategically or allow it to grow beyond its regulatory and economic influence.

The answer will not be found in speeches or policy intent notes. It will be embedded in the fine print of taxation, compliance architecture, and regulatory signalling contained in the Union Budget 2026.

In the Union Budget 2025, the government chose to maintain the existing crypto tax framework, offering no relief to the industry. The 30% tax on virtual digital asset gains and the 1% TDS on transactions were retained without any changes, despite repeated appeals from exchanges and industry stakeholders. 

The budget made no specific mention of crypto or Web3, signalling that the government preferred to continue with a cautious, tax-first approach rather than introduce regulatory clarity or reforms.

What parliament data shows about crypto tax in India

In a written reply tabled in the Lok Sabha in December 2025, the government laid out, for the first time in detail, how crypto taxation is actually playing out on the ground. The response showed that while tax collections from crypto transactions have gone up over the last three years, the system itself is far from settled. 

The Finance Ministry admitted that enforcement action had to be taken against several exchanges for non-compliance. 

In its own words, “survey actions under Section 133A of the Income Tax Act were carried out against three crypto exchanges and non-compliance of TDS provisions under Section 194S to the tune of ₹39.8 crore and undisclosed income of ₹125.79 crore were detected.” The reply also revealed that further investigations led to the discovery of undisclosed income amounting to ₹888.82 crore linked to virtual digital asset transactions.

What stands out even more is what the government has not done. In the same reply, the Finance Ministry clearly stated that no study has been carried out to examine how other countries tax or regulate crypto. 

“No studies for implementation of taxation models as seen in other countries, such as Thailand and Indonesia, for cryptocurrency have been undertaken,” the government said. This effectively confirms that India’s approach so far has been driven almost entirely by tax enforcement, not by policy design.

The contradiction is hard to miss. On one hand, authorities are collecting hundreds of crores in taxes and carrying out surveys and searches. On the other hand, there is still no formal framework that defines how crypto should operate in India, how exchanges should be regulated, or how the sector fits into the broader financial system. 

Even during India’s G20 presidency, no concrete global framework on crypto regulation emerged. As things stand, India is taxing crypto aggressively, but without clearly deciding what role the asset class is meant to play in the country’s economy.

The illusion of success in the tax numbers

At first glance, the government appears to have succeeded in bringing crypto activity into the tax net. Official data shows that tax deducted at source on virtual digital asset transactions rose to approximately ₹511.83 crore ($55.8 million) in Financial Year (FY) 2024–25, up from ₹362.7 crore ($39.5 million) the previous year and more than double the ₹221.27 crore ($24.1 million) collected in FY 2022–23.

These figures are frequently cited as proof that the crypto tax framework is working. But this conclusion does not survive closer scrutiny.

Tax Deducted at Source (TDS) data captures only transactions conducted on Indian exchanges that comply with domestic reporting norms. It does not reflect the much larger volume of trading undertaken by Indian users on offshore platforms, nor does it capture activity routed through decentralized exchanges, peer-to-peer networks, or overseas entities that fall outside Indian jurisdiction.

Industry estimates derived from blockchain analytics, exchange order flow, and cross-border settlement data indicate that Indian residents traded between ₹4.8 lakh crore ($52.37 billion) and ₹5.2 lakh crore ($56.7 billion) worth of digital assets on offshore platforms in FY 2024–25 alone. In other words, for every rupee collected in TDS, nearly ₹100 worth of trading activity occurred outside the Indian tax net.

Once this context is applied, the apparent success of the current regime begins to look less like regulatory effectiveness and more like statistical distortion. The tax system is capturing a shrinking slice of a much larger market that has quietly moved beyond its reach.

Background of the crypto tax framework

India introduced crypto taxation in the Union Budget 2022. The Finance Act that year brought virtual digital assets under the Income Tax Act, imposing a 30% tax on gains and a 1% TDS on every transaction.

The idea behind the TDS was to track transactions in a market that was largely unregulated at the time. It was not meant to be a revenue source. It was not designed as a revenue-raising measure.

The measure was positioned as a tracking mechanism rather than a fiscal one. No changes have been made to this structure since its introduction, and no separate regulatory framework has been notified alongside it.

How a compliance tool became a market distorter

The central flaw in India’s crypto taxation regime lies not in its intent, but in its structure.

Unlike the capital gains tax, which applies only to profits, the 1% TDS on virtual digital assets is levied on the gross value of every transaction. In traditional financial markets, the very idea of such a setup would be unheard of.

In markets where liquidity and turnover are the main drivers, margins are slim, and capital efficiency is of the utmost importance.

Typically, professional traders use margins that range between 0.1% and 0.3% per trade.

Market makers, who facilitate liquidity and help stabilize prices, operate on even tighter spreads. A flat 1% deduction on every transaction renders these activities mathematically unviable.

The arithmetic is unforgiving. After 10 trades, 10% of deployed capital is lost to tax regardless of profitability. No market participant can sustain operations under such conditions.

The impact was immediate and predictable. Liquidity providers exited Indian exchanges. Bid–ask spreads widened sharply. Trading volumes collapsed. Retail participants faced poorer execution and higher costs. Exchanges saw revenues shrink, leading to layoffs, closures, and consolidation.

What emerged was not a regulated ecosystem, but a hollowed-out one.

The tax structure that made participation unviable

The impact of the 1% TDS cannot be understood without looking at the second pillar of India’s crypto tax framework: the 30% tax on gains under Section 115BBH.

This provision applies a flat tax rate on all profits from virtual digital assets, with no allowance for loss set-off, no carry-forward of losses, and no deduction for trading costs. In effect, crypto is treated differently from every other financial asset class in the country.

In equity markets, losses can be adjusted against gains. In commodities and derivatives, trading expenses are deductible. In crypto, none of this applies.

The practical consequence is visible at the transaction level.

Why the math simply does not work for traders

To understand why India’s crypto tax regime has driven activity offshore, it helps to look at a simple, real-world example.

Consider a retail trader who deploys ₹10 lakh in crypto over the course of a year.

When this trader first deposits funds into a crypto exchange and executes a buy order, 1% TDS is deducted immediately. That means ₹10,000 is taken at the time of purchase itself, even before any profit is made.

If the trader later sells the asset and withdraws the funds, another 1% TDS is deducted at exit. That is another ₹10,000 gone.

Now, assume the trader redeploys the same capital again during the year, which is common in active markets. The moment the funds are deposited again and trades are executed, another 1% TDS applies. And when the trader exits for the second time, yet another 1% is deducted.

In practical terms, a trader who deposits and withdraws capital twice in a year ends up paying close to 4% of total capital purely in TDS, regardless of whether any profit was made.

This deduction happens on turnover, not on income.

It is important to underline what this means. The tax is applied even if the trader makes a loss. It is applied even if the trade breaks even. And it is applied before profitability is calculated.

On top of this, any profit that does remain is taxed separately at 30% under Section 115BBH, with no allowance for loss set-off, no carry forward of losses, and no deduction for transaction costs or fees.

So in effect, a crypto trader in India faces:

• 1% TDS when buying (18% GST on exchange fees)
• 1% TDS when selling (18% GST on exchange fees)
• Repetition of this cycle with every redeployment of capital
• 30% tax on net profits
• On top of this, the government also charges 4% as a health and education cess
• No ability to offset losses
• No recognition of trading expenses

This structure means that even a modest trading strategy becomes unviable. A trader making 2–3% annual returns can end up paying more in tax than the profit actually earned.

How does this compare with stock market taxation

This is where the contrast with India’s equity markets becomes stark.

In stock trading:

• There is no TDS on buying or selling shares
• Securities Transaction Tax (STT) is extremely small and applies only once per trade
• Capital gains are taxed only on profit, not on turnover
• Losses can be set off against gains
• Losses can be carried forward for up to eight years
• Business expenses can be deducted for active traders

For example, an equity trader who trades ₹10 lakh multiple times in a year does not lose capital simply for participating in the market. Tax liability arises only when profits are realized.

In crypto, however, the tax is imposed at every step of activity, regardless of outcome.

This is why the crypto market reacts so differently to taxation than equity markets. Crypto trading depends heavily on liquidity, volume, and capital efficiency. A structure that taxes capital movement itself destroys these fundamentals.

The result is predictable. Serious traders move offshore. Liquidity migrates. Market making disappears. And the remaining activity becomes shallow, expensive, and inefficient.

This is not a question of avoiding tax. It is a question of whether a market can function at all under a structure where capital is taxed repeatedly before profits even exist.

Adding to the regulatory burden, the government has now made crypto tax reporting mandatory from 2026, requiring all traders to disclose their crypto holdings and transactions to the tax authorities. This measure reinforces the existing TDS and flat tax structure, making compliance even more complex for active traders.

That is the core flaw in India’s current crypto tax design and the reason why trading volumes have shifted abroad despite rising TDS collections.

This is why volumes did not decline gradually. They collapsed.

Comparison of Crypto vs Stock Market Taxation in India (₹10 Lakh Example)

Between FY 2022–23 and FY 2023–24, trading activity on Indian exchanges fell by more than 70%, even as global crypto volumes remained stable. The issue was not demand. It was costly.

Crypto became the only asset class in India where capital was taxed on entry, exit, and profit, without recognition of risk or loss. Once this structure took hold, the outcome was inevitable.

The quiet migration offshore

By late 2023, the consequences of this structure had become visible. Trading volumes on Indian exchanges had declined by more than 70% from their peak. Several platforms shut down entirely, while others pivoted to non-crypto businesses.

At the same time, Indian activity on offshore exchanges surged. Dubai, Singapore, Seychelles, and similar crypto-friendly jurisdictions turned out to be the hotspots of choice for Indian traders. Stablecoins replaced the fiat rails. Peer-to-peer markets boomed. 

VPN usage increased after the ban of some foreign platforms, showing that users bypassed restrictions to continue trading. This migration was not limited to retail traders. 

Founders, developers, market makers, and proprietary trading desks began relocating operations abroad. Intellectual property was registered outside India. Treasury functions moved offshore. Venture capital followed.

What occurred was not capital flight in the traditional sense, but something more subtle and potentially more damaging: the gradual export of an entire financial ecosystem.

The numbers behind the shift 

When viewed alongside actual trading activity, the scale of this displacement becomes clear.

The data reveal a stark reality: as enforcement increased, compliance did not rise proportionally. Instead, the activity migrated. The tax base narrowed even as headline collections rose.

This is the classic signature of a policy that suppresses participation rather than regulating it.

Consolidation at the exchange level

FY 2024–25 crypto data shows concentration at a few exchanges. CoinDCX paid ₹259.58 crore ($28.3 million) in TDS. Total TDS collected was ₹511.83 crore ($55.8 million). More than 50% came from CoinDCX. 

Also Read: CoinDCX CEO bats for 0.01% Crypto Tax in India ahead of budget

Smaller exchanges struggled with TDS compliance. Some shut down. Some reduced operations. Liquidity moved to larger exchanges. 1% TDS made market making difficult. Section 133A surveys found ₹39.8 crore ($4.38 million) unpaid TDS and ₹125.79 crore ($13.72 million) undisclosed income at the exchange level. Other investigations found ₹888.82 crore in undisclosed income from Virtual Digital Assets (VDAs). Most trading now happens at a few large platforms.

A growing gap between potential and reality

The timing of the Union Budget 2026 matters because the economic opportunity is no longer speculative.

Estimates suggest that embracing virtual digital assets and the broader Web3 ecosystem could add $1.1 trillion to India’s GDP by 2032. Large-scale cloud and digital adoption, including blockchain, could contribute $380 billion to GDP by 2026 and create 14 million jobs. 

Yet, the divergence between India’s potential and its current trajectory is illustrated by the staggering volume of trade that has exited the domestic jurisdiction. Indian nationals traded nearly ₹5 lakh crore on offshore platforms in a single year. 

If this volume had been executed on compliant domestic exchanges, the 1% TDS, or even a rationalized 0.01% TDS, would have yielded significant revenue. More importantly, trading fees would have generated Goods and Services Tax for the state. Instead, this value was captured by foreign entities such as Binance, Bybit, and KuCoin, contributing nothing to the Indian exchequer.

The shadow multiplier of Web3

The ₹5 trillion figure cited in industry discourse refers not just to lost trading volumes but to the broader multiplier effect of the Web3 economy. By pushing trading offshore, India disincentivizes the establishment of domestic liquidity providers, market makers, and custodians. 

These are high-tech businesses that pay corporate tax and employ skilled engineers. Startups require liquid token markets to monetize their products. Suppressed domestic markets force them to incorporate in Dubai or Singapore to access capital and liquidity. India possesses 11% of the global Web3 talent pool, yet without a domestic market, this talent largely works for foreign protocols. 

Indian engineers build the product, but the intellectual property and economic value accrual occur elsewhere. The current tax regime acts as a primary incentive for offshore migration, effectively subsidizing foreign exchanges at the cost of domestic industry health. The Make in India initiative is undermined in the digital sector by a tax policy that makes trade in India mathematically unviable.

How India’s approach differs from global practice

Globally, the trajectory has been markedly different.

The United States has gone down the path of regulatory clarity through legislation and agency guidance, culminating in the GENIUS Act, which brings stablecoins into the regular banking system. 

Europe’s Markets in Crypto Assets (MiCA) regulation is a single licensing regime for 27 countries. Singapore and Dubai have set up clear and predictable rules, thus fostering institutional involvement.

India, by contrast, has relied primarily on taxation as a regulatory substitute.

This approach has produced a paradox. While the country possesses one of the largest crypto user bases and developer communities in the world, it remains largely absent from the institutional layer of the global digital asset economy. Major funds, custodians, and infrastructure providers operate elsewhere.

Markets can adapt to high taxes. What they cannot adapt to is uncertainty.

Global regulatory benchmarks

While India debated TDS rates, the United States and the European Union moved decisively to integrate digital assets into formal financial systems. The GENIUS Act in the United States integrates stablecoins with insured banks. 

Dollarization risk is a major concern for the Reserve Bank of India (RBI) and remittance flows. Europe’s MiCA regulation creates a single licensing framework for 27 countries, allowing passporting for CASPs and institutional inflows. 

Dubai VARA and Singapore MAS have established clear rules, attracting Indian founders and capital. India’s focus on taxation rather than regulation has produced a paradox. 

While the country possesses one of the largest crypto user bases and developer communities, it remains absent from the institutional layer of the global digital asset economy. Major funds, custodians, and infrastructure providers operate elsewhere.

What global data shows

A recent PricewaterhouseCoopers (PwC) report, a firm that provides audit, tax, and advisory services across 151 countries, on global crypto regulation shows how far other markets have already moved ahead. The report says more than 560 million people worldwide now hold digital assets, and most large economies no longer treat crypto as an experimental sector.

According to PwC, countries in Europe, the US, and parts of Asia have already put full regulatory systems in place for crypto exchanges, custodians, and stablecoin issuers. This includes licensing for exchanges, mandatory audits, capital requirements, and compliance standards that mirror those followed by banks.

The report also points out that enforcement has replaced uncertainty. Regulators are no longer debating whether crypto should exist. They are monitoring transactions, tracking risks, and supervising platforms through formal frameworks.

PwC notes that jurisdictions offering clear rules and predictable taxation are seeing higher institutional participation and business activity. In contrast, countries relying mainly on restrictive taxes or unclear policies are seeing trading volumes and startups shift abroad.

The report adds that stablecoins and tokenised assets are now a key focus area globally, with several countries integrating them into their financial systems under regulated structures.

What the PwC report says about India

India does not have a full crypto rulebook yet. PwC says over 52 countries already have clear regulations for crypto. These rules include licensing, audits, and compliance requirements. India is not among them.

Despite this, India has a very large crypto market. Around 90 million Indians hold or have used crypto. Adoption is high, but there are no clear rules for exchanges or businesses.

So far, India has focused on taxation. There is a 30% tax on crypto income and a 1% TDS on transactions. This helps the government track activity, but it does not make things clear for companies or users. There is no licensing system, no set capital requirements, and no standard compliance process.

In other countries, exchanges follow strict rules. They have audits, customer protection, and reporting requirements. India has some checks, but mostly through tax tracking. There is no dedicated regulatory structure.

Because of this, bigger exchanges can survive because they can pay for compliance. Smaller exchanges struggle, and some have shut down or reduced activity. Some trading has moved abroad because of uncertainty about the rules.

India has scale and a lot of users, but no clear framework to support them. Without proper rules, the market is unstable. If things do not change, India could fall behind countries that have set up clear crypto regulations.

The policy dilemma for the Union Budget 2026

The Finance Ministry faces a choice. Retaining a 1% TDS may secure ₹500–600 crore ($55 – $65 million) for the Consolidated Fund, but it risks losing India’s seat in the future digital economy. Industry bodies advocate for a reduced TDS of 0.01%, allowing liquidity providers to return and offshore volume to be repatriated. 

Regulatory clarity and incentives to build domestic infrastructure are critical if India is to capture the $5 trillion opportunity and protect its talent and intellectual property. Strategic action now could turn policy inertia into an economic engine, creating jobs, tax revenue, and global leadership.

Industry voices on Budget 2026 and crypto

As Union Budget 2026 approaches, leaders in India’s crypto industry are watching closely. They say the current tax framework, introduced in 2022, has shaped trading behavior and pushed activity offshore.

Many highlight that regulatory clarity and predictable rules will be key to bringing domestic activity back. India already has a large base of crypto users and Web3 talent. But high taxes and unclear rules are limiting domestic participation.

Vikram Subburaj, CEO, Giottus.com, said: “The India crypto story is no longer hypothetical. Nearly 100 million Indians hold digital assets and the broader global base is over 560 million. We are past early adoption and are in the real participatory growth stage. For 2026, FIU-IND’s updated AML and CFT expectations push the sector toward bank-grade KYC, monitoring, and traceability. In the Budget, the most practical unlock would be predictability. This includes a clear rulebook for VDA intermediaries and reviewing frictions like the 1% TDS that hurts liquidity and onshore participation.”

He also added, “India can be an innovation hub if compliant players get clarity on licensing, custody, and taxation. There should also be regulatory sandboxes for Web3 rails at UPI scale and a dedicated crypto regulatory body for single-window clearance and customer protection.”

Sumit Gupta, Co-Founder & CEO, CoinDCX, said: “As we approach Budget 2026, the virtual digital asset sector is looking for measured relief, especially since it has been four years since the current taxation framework was introduced. The decisions taken now can accelerate innovation and help India emerge as a global Web3 and VDA leader.”

Gupta added, “Pragmatic reforms that bring users back to compliant platforms while strengthening compliance are key. Reducing TDS from 1% to 0.01% would retain monitoring while removing the primary incentive for offshore migration. Aligning the 30% capital gains tax with income tax slabs, allowing loss offsetting and standard business deductions for Web3 ventures, would create a stable and transparent ecosystem for responsible innovation.”

Edul Patel, CEO, Mudrex, said: “I do not expect anything to change immediately in this Budget regarding the 1% TDS or the 30% tax. These do not solve government concerns. Over time, more clarity is expected on regulatory rules. Recent FIU updates focus on the formalization of infrastructure and tracking for crypto players. There is also chatter about dedicated bodies responsible for crypto, including stablecoin monitoring by the RBI. Gradually, we expect more formalization and clarity for crypto payments in India.”

Vikas Gupta, Country Manager – India, Bybit, said: “2026 is likely to be a selective market rather than broadly bullish. Short-term rebounds may appear due to liquidity shifts, positioning resets, or technical factors, not underlying fundamentals. Macro developments, like US inflation and Fed policy, will influence market direction. Investors should focus on risk management, diversification, controlled exposure, and technical signals. The market will reward informed and disciplined participation rather than speculation.”

Ashish Singhal, Co-Founder of CoinSwitch, said: “India’s VDA ecosystem is at a pivotal stage, with growing adoption across the country. However, the current tax framework presents challenges for retail participants by taxing transactions without recognizing losses, creating friction rather than fairness. A reduction in TDS on VDA transactions from 1% to 0.01% could improve liquidity, ease compliance, and enhance transparency while preserving transaction traceability. Raising the TDS threshold to ₹5 lakh would help protect small investors from disproportionate impact.”

Ashish also added, “Introduced in 2022 as a stand-in for regulation at that time, VDA taxation has since been complemented by strong oversight from FIU-IND and improved compliance. This Budget presents a great opportunity to revisit the framework in a manner beneficial to both investors and the government. We remain hopeful that the government will recognize this gap and consider reviewing the current framework soon.”

Together, these perspectives show that the industry is not looking for exemptions. They are asking for “predictable rules, rational taxation, and a clear regulatory framework.” This can support domestic liquidity, innovation, and compliance.

What the industry is actually asking for

Contrary to popular perception, the industry is not seeking exemptions or special treatment. Its demands are narrow and pragmatic.

A reduction of TDS to around 0.01%, sufficient to maintain transaction traceability without destroying liquidity.

Rationalization of capital gains taxation, including loss set-offs.

Clear legal classification of digital assets and custody norms.

Regulatory certainty that allows long-term planning and institutional participation.

These measures would not weaken oversight. They would strengthen it by bringing activity back within the formal economy.

A decision that will shape the next decade

The debate around crypto in India is often framed as ideological. In reality, it is economic.

It is about whether India wants to shape the next generation of financial infrastructure or merely observe it from the sidelines. Whether it wishes to build platforms or consume them. Whether it wants to capture value or export it.

Budget 2026 will not announce this choice explicitly. But it will encode it — quietly, precisely, and decisively — in tax rates, definitions, and compliance rules.

And those choices will determine whether India emerges as a serious participant in the global digital economy or watches its most promising frontier mature elsewhere.