Crypto investing is evolving beyond its early hype cycles. Regulation, investor awareness, risk management and new technologies are changing how people trade digital assets, all while raising pertinent questions about what responsible participation should look like.
At TechSparks 2026, Rajagopal Menon, Vice President at WazirX; Satish Mishra, CTO of Pi42 and SharkExchange; and Sharat Chandra, Founder of EmpowerEdge Ventures, joined Swetha Kannan, Deputy Editor at YourStory, to discuss the changing crypto landscape, the need for regulatory clarity, and the growing role of AI in trading.
A new crypto landscape emerges
India’s crypto market has historically been a dynamic space, growing rapidly during the 2021-22 bull run, where Menon noted that WazirX’s spot markets processed close to $48 billion in transactions during that period. This was succeeded by the taxation measures introduced in the subsequent Budget that changed the market significantly.
According to Menon, the resulting environment of these changes has placed Indian exchanges at a disadvantage compared with foreign platforms. Domestic exchanges must deduct tax at source (TDS) and operate within the 30% tax framework, while foreign exchanges have not faced the same requirements, he argued. “I think a stable environment or a better environment would be that the same rules apply for everybody, so that Make in India is made for Indian exchanges,” he shared.
Menon also pointed to a shift in trading activity. As spot trading volumes declined, futures and derivatives began gaining traction. He expects this segment to see significant adoption in India.
Regulation that makes room for all players
Moving to the question of regulation, Chandra shared that exchanges had helped educate investors about different crypto assets and the importance of understanding risks, but that gaps in the regulatory framework remained. “I think once this space is regulated, that can lead to a lot of capital inflow to the country,” he said.
Chandra pointed out that while exchanges are required to follow KYC norms, there are still gaps when it comes to verifying identities as assets move on-chain. He suggested that regulatory sandboxes could help address some of these challenges. SEBI and IFSCA already have sandboxes to encourage innovation in the capital markets, but digital asset native fintech players have not yet been given the go-ahead to participate.
He also highlighted the potential of tokenisation, pointing to the tokenisation of corporate bonds as an example. For now, participation is limited to institutional players. Chandra suggested that opening up regulatory sandboxes to more web3 fintech companies could help them test new ideas, improve existing processes and play a bigger role in the tokenisation journey.
Crypto infrastructure: Built for endurance
Unlike traditional financial markets, crypto trades 24 hours a day, seven days a week. For tech teams, that means monitoring systems, managing risk and responding to incidents without the predictable downtime offered by market closing hours.
Mishra described how trading activity on crypto platforms can pick up during evenings and weekends, partly in response to movements in US markets. This places continuous demands on observability, alerts and leverage monitoring.
His experience building a spot trading exchange also showed how quickly demand for derivatives can outpace infrastructure development. At Pi42, the team took a different approach from the outset, building a platform specifically for derivatives rather than adapting a spot-trading system.
Production incidents, Mishra noted, had occurred over weekends when systems could not keep pace with demand. The experience underlined the need to build infrastructure around crypto’s round-the-clock operating model.
Beyond the hype: When risk management is embedded in processes
As more people enter the crypto market, investor education and effective compliance become increasingly important. Menon pointed to WazirX’s ‘Gangs of Cryptopur’ campaign, which aims to help investors understand what they’re trading. He also spoke about taking a disciplined approach to crypto, comparing the historical returns of different asset classes with Bitcoin. His advice was to think long term rather than treat crypto as a series of short-term bets.
For exchanges, making the process easier for users is just as important as maintaining compliance checks. Mishra explained that KYC can be frustrating when an application fails and users have to start all over again. Technology can make this simpler by letting users pick up where they left off and clearly explaining what needs to be corrected.
He added that genuine users are generally less likely to be bothered by compliance checks than those trying to get around them. The aim is to make the process smoother for users while retaining the checks needed to identify suspicious activity.
Putting AI to work in crypto: regulation, education, innovation
AI is also changing how traders research markets and assess potential trades. Menon said WazirX has introduced an AI-powered feature that scans more than 300 tokens to spot those showing bearish momentum. WazirX AI - India’s first AI-powered crypto agent is a conversational co-pilot that handles advanced, multi-step requests, including technical indicators such as the Moving Average Convergence Divergence (MACD) and Relative Strength Index (RSI), and offers recommendations for users to consider. Traders must confirm their chosen strategy before the AI places an order with stop-loss and take-profit parameters.
Menon sees AI as a way to analyse large volumes of market data and spot patterns, but he also highlighted that AI should support decisions rather than make them for users.
Mishra also urged traders to backtest AI-generated strategies and monitor their performance before using them in live markets, saying “If you ask AI to give you a strategy and then run with it, make sure that you are also observing it so as soon as it goes wrong, you can unplug it.”
Chandra noted that regulatory implications will depend on how AI is used. Educational tools could be treated differently from systems that offer personalised investment advice, which could fall under investment-adviser regulations. He also stressed the need for AI systems to be trustworthy, explainable, auditable and fair.
What comes next for crypto?
As the crypto landscape changes with new regulations, AI disruptions and evolving investor expectations, Menon, Chandra and Mishra were asked what would represent the next phase of the sector.
For Menon, it was futures and derivatives. Mishra agreed, noting that derivatives have continued to grow and address specific needs within the crypto ecosystem.
Chandra pointed to another emerging possibility: compute futures, with developments such as the launch of compute futures by CME in the US indicating how new asset classes could emerge at the intersection of AI and digital assets.
As the market evolves, the discussion highlighted three interconnected priorities: clearer regulation, stronger infrastructure and more informed use of AI. The next phase of crypto investing in India will depend not just on new products and trading opportunities, but also on how effectively the ecosystem manages risk and builds trust.
Source: YourStory
