CoinDCX CEO Flag RBI Fraud Proposal Over Crypto Transfer Risk

• RBI fraud proposals drew crypto response as CoinDCX warned of slower legal transfers.
• Sumit Gupta backed safeguards but urged whitelisting and a higher ₹25,000 delay limit.
• CoinDCX said smarter fraud detection works better than broad caps on account credits.

The Reserve Bank of India’s proposed fraud safeguards have drawn a response from the crypto sector. CoinDCX CEO Sumit Gupta said the plan addresses real risks in digital payments. He added that some measures could slow legitimate crypto-linked transfers and increase friction for users.

In an X post on Monday, Gupta responded to the RBI discussion paper, “Exploring Safeguards in Digital Payments to Curb Frauds,” released on April 9. The paper proposed four structural changes to digital transaction processing in India.

His comments came soon after CoinDCX committed ₹100 crore to the Digital Suraksha Network (DSN). The private-sector initiative is focused on combating cyber fraud.

RBI Fraud Proposals Raise Crypto Transfer Concerns

One RBI proposal would impose a one-hour lag on person-to-person digital transfers above ₹10,000. The aim is to create a cooling-off period. During that window, a victim could stop a transaction before the funds reach a fraudster.

Gupta accepted the purpose of the measure. He objected to the threshold. In his view, ₹10,000 is too low in a country where UPI is used for routine payments such as rent and groceries.

He suggested increasing the threshold to at least ₹25,000. Gupta also proposed a narrower framework. Under that structure, the one-hour delay would apply only to first-time transactions sent to a new recipient.

After a payee is whitelisted, transfers should remain instant, according to Gupta. He argued that this design would preserve payment speed while adding protection where risk is higher. 

Many transfer money between bank accounts and FIU-registered exchanges. A blanket one-hour hold on every transfer above ₹10,000 could delay onboarding and affect trading activity.

Gupta warned that such friction could push users toward offshore platforms. Those platforms already operate outside India’s regulatory net. 

Another RBI proposal would require trusted-person approval for senior citizens and persons with disabilities on transactions above ₹50,000. Gupta described this as a thoughtful safeguard. His concern focused on execution rather than intent.

RBI Credit Caps and Kill Switch Draw Mixed Response

The RBI suggested capping annual aggregate credits into individual and small business accounts at ₹25 lakh. Amounts above that limit would be treated as shadow credits until further verification is completed.

Gupta said broad credit caps are not the right solution. He argued that better onboarding and pattern detection across institutions would be more effective.

An open fraud intelligence API is one of the network’s four core pillars. It is designed to let exchanges, banks, fintechs, and digital lenders share scam-related data in real time.

Gupta said coordinated detection could flag suspicious behavior across institutions without freezing legitimate funds. He argued that this approach would be more effective than broad credit caps.

The strongest support came for the fourth proposal. A customer-controlled kill switch would let users disable all digital payment channels from an account in one action. Reactivation would require full re-verification.

Gupta called the feature simple and empowering. He also raised a broader idea. New bank accounts, he suggested, could have digital payments turned off by default and enabled only on request.

He pointed to UIDAI’s biometric lock feature on the mAadhaar app. That system keeps biometric authentication off by default and opens it for a limited period when needed. Gupta argued that a similar setup for digital payments could add a stronger layer of self-defense against fraud.

Related: CoinDCX CEO Sumit Gupta Launches ₹100Cr ($10.5M) Safety Plan