Know your rights before investing in digital assets

To understand your rights when you trade or trade cryptocurrencies, you first need to understand how this ecosystem works. Going down to the basics, cryptocurrency is an unregulated asset that is usually exchanged or traded on cryptocurrency exchange platforms. These platforms offer investment options, similar to those available for the typical stock trading setup that investors are familiar with. Cryptocurrencies and non-fungible tokens (NFTs), among other virtual digital assets (VDAs), are typically stored on digital wallets. These wallets may be linked to a specific exchange or provided by any other service provider, which is not an exchange itself, nor the underlying technology. VDA-based.

Amid all the government warning about the risks associated with technology, end users must familiarize themselves with what they can expect from these service providers and online platforms.

While there is no law governing the ecosystem, an investor will not be left without any remedy. Investors can still rely on the rights provided under information technology law: (i) resolve complaints through a pre-established mechanism provided by the supplier; (ii) expect their data to be safe and secure in the online environment and transactions; (iii) to be resistant to cybercrime including fraud and financial theft to identify theft and any fraud related concerns (this will also find solutions under criminal law, through the Indian Penal Code); (iv) to be able to make changes to their profile registration, including updating and correcting their banking and other personal information.

From obligations under applicable data privacy laws, users are allowed to withdraw consent for the ongoing processing of their data; this could allow users to end their relationship with the crypto platform and seek to have their profile deleted.

Consumers in India also have the right to: (i) be heard; (ii) remedy; (iii) safety; (iv) be notified; (v) consumer education, across all sectors. In addition, in accordance with consumer law, users must be provided with all information necessary to make an informed decision regarding the platform’s services. Drawing from the US Securities and Exchange Commission and the Sebi, the Central Consumer Protection Agency also recently issued separate guidelines for monitoring and regulating advertisements. This will also apply to platforms participating in VDA transactions.

In addition to the statutory rights discussed herein, the user is also governed by the specific terms and conditions of the cryptocurrency platform, digital wallet, as a result of which the user will engage in transactions. related to cryptocurrencies. The terms and conditions of each platform will depend on the products and services offered and will be specific to the service provider and not necessarily comparable to the platform or service provider. other. Several platforms such as Coinbase, CoinSwitch, Binance, and CoinDCX have made efforts to educate their users and enable consumers to be wary of the associated perks and shortcomings of services and products. Users are encouraged to review the terms and conditions of any product/service available online, to understand the risks, benefits, and limitations of contracting with such agencies.

It is important to understand that because this market is unregulated, relying on the law derives from a wide range of information technology laws (intermediaries, privacy and data protection), privacy laws, and so on. consumer protection, contractual obligations and the penal code.

As there is a direct contract between the platform and the end user, some rights granted to you as a user are at the sole discretion of the specific platform, service provider, in addition to those requested by law.

Abhishek Malhotra is a managing partner at TMT Law Practice.

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