Definition
Crypto Exchange
A crypto exchange is a platform where users buy, sell and trade cryptocurrencies; Indian exchanges register as reporting entities and deduct 1% TDS. This is informational, not advice.
A crypto exchange matches buyers and sellers of crypto assets and may also custody users' coins. Centralised exchanges hold customer assets and keys, while decentralised exchanges let users trade directly from their own wallets.
In India, crypto exchanges fall under anti-money-laundering (PMLA) reporting obligations, must follow KYC norms, and typically deduct the 1% TDS on transfers, reporting transactions to authorities. Gains users make are taxed at the flat 30%.
Exchanges carry risks including hacks, insolvency and platform freezes, in addition to the underlying volatility of crypto. This is informational only and not investment advice.
Related terms
- 1% TDS on CryptoIndia levies a 1% tax deducted at source on the transfer of virtual digital assets above specified thresholds, creating an audit trail of crypto transactions. This is informational, not advice.
- Crypto Wallet (Hot vs Cold)A crypto wallet stores the private keys that control your crypto assets; a hot wallet is internet-connected for convenience, while a cold wallet stays offline for security. This is informational.
- StablecoinA stablecoin is a cryptocurrency designed to hold a steady value, usually pegged to a fiat currency like the US dollar, through reserves or algorithms. This is informational, not advice.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.