Investing in cryptocurrencies is moving beyond the initial hype. Regulation, increased investor awareness, risk management, and new technologies are transforming how digital assets are traded while raising important questions about responsible participation in this space.
At the TechSparks 2026 event, Rajagopal Menon, Vice President of WazirX; Satish Mishra, CTO of Pi42 and SharkExchange; and Sharad Chandra, founder of EmpowerEdge Ventures, participated in a discussion with Suetha Kannan, Deputy Editor of YourStory. They discussed the changing landscape of the crypto industry, the need for regulatory clarity, and the growing role of artificial intelligence in trading.
The Indian cryptocurrency market has traditionally been a dynamic space that grew rapidly during the 2021–2022 bull cycle. Menon noted that WazirX spot markets processed nearly $48 billion in transactions during that period. However, subsequent tax measures introduced in the budget have significantly altered the market.
In Menon's view, the situation resulting from these changes puts Indian exchanges at a disadvantage compared to foreign platforms. He emphasized that local exchanges are obligated to withhold Tax Deducted at Source (TDS) and operate within the 30% tax regime, whereas foreign exchanges have not faced such requirements. He opined that a stable or improved environment should involve applying the same rules to everyone so that support for the 'Make in India' initiative is directed towards Indian exchanges.
Menon also pointed out a shift in trading activity: as spot trading volumes decline, futures and derivatives are gaining popularity. He predicts significant adoption of this segment in India.
Turning to regulation, Chandra stated that exchanges have facilitated investor education on various crypto assets and risk understanding, but gaps remain in the legal framework. He asserted that after regulation, there could be a significant inflow of capital into the country.
Chandra indicated that while exchanges are required to comply with KYC norms, shortcomings persist in identity verification as assets move across the blockchain. He suggested that regulatory sandboxes could help resolve some of these issues. SEBI and IFSCA already have such sandboxes to stimulate innovation in capital markets, but fintech companies focused on native digital assets have not yet received permission to participate.
He also highlighted the potential of tokenization, citing the tokenization of corporate bonds as an example. Currently, participation in this process is limited to institutional players. Chandra proposed that opening regulatory sandboxes to a wider range of Web3 fintech companies would allow them to test new ideas, refine existing processes, and play a more significant role in the tokenization process.
Unlike traditional financial markets, cryptocurrencies trade 24/7, seven days a week. For technical teams, this means constant system monitoring, risk management, and incident response without the predictable downtime provided by market closing hours.
Mishra described how trading activity on crypto platforms can intensify during evenings and weekends, partly in response to movements in US markets. This creates continuous demands for observability, alerting, and leverage monitoring. His experience building a spot trading exchange showed how quickly demand for derivatives can outpace infrastructure development. The Pi42 team initially chose a different approach, creating a platform specifically for derivatives instead of adapting a spot trading system. Mishra noted that production incidents occurred on weekends when systems could not keep up with demand. This experience underscored the necessity of building infrastructure around the 24/7 operational model of cryptocurrencies.
As more people enter the crypto market, investor education and effective regulatory compliance become increasingly vital. Menon mentioned WazirX's 'Gangs of Cryptopur' campaign, aimed at helping investors understand what they are trading. He also spoke about the need for a disciplined approach to cryptocurrencies, comparing the historical returns of various asset classes to Bitcoin. His advice was to think long-term rather than viewing cryptocurrency as a series of short-term bets.
For exchanges, simplifying the user process is as important as maintaining compliance checks. Mishra explained that KYC can be frustrating if an application is rejected, forcing the user to start over. Technology can simplify this by allowing users to resume where they left off and clearly explaining what needs correction. He added that genuine users are generally less concerned about compliance checks than those trying to bypass them. The goal is to make the process smoother for users while retaining the checks necessary to detect suspicious activity.
Artificial intelligence is also changing how traders research markets and assess potential deals. Menon reported that WazirX implemented an AI-based feature that scans over 300 tokens to identify those exhibiting bearish momentum. WazirX AI is the first AI agent for cryptocurrencies in India that acts as a conversational assistant, processing complex multi-step queries, including technical indicators like MACD and RSI, and offering users options for consideration. Traders must confirm the chosen strategy before the AI places an order with stop-loss and take-profit parameters. Menon views AI as a way to analyze large volumes of market data and identify patterns, but he also stressed that AI should support decisions, not make them for users.
Mishra also strongly urged traders to backtest AI-generated strategies and monitor their performance before using them in live markets, advising: 'If you ask AI for a strategy and then act on it, make sure you are also watching it so that when it starts going wrong, you can turn it off.'
Chandra noted that the regulatory implications will depend on how AI is used. Educational tools may be viewed differently from systems offering personalized investment advice, which could fall under investment advisor regulations. He also emphasized the need for AI systems to be robust, explainable, auditable, and fair.
As the crypto landscape evolves under the influence of new regulations, AI breakthroughs, and changing investor expectations, Menon, Chandra, and Mishra were asked about the next phase of the sector. For Menon, this was futures and derivatives. Mishra agreed, noting that derivatives continue to grow and meet specific needs within the crypto ecosystem. Chandra pointed to another emerging opportunity: compute futures, given developments such as the launch of CME compute futures in the US, indicating how new asset classes can emerge at the intersection of AI and digital assets.
As the market develops, the discussion highlighted three interconnected priorities: clearer regulation, stronger infrastructure, and more conscious use of AI. The next phase of crypto investing in India will depend not only on new products and trading opportunities but also on how effectively the ecosystem manages risks and gains trust.
