To understand the rights given to you when you are dealing with, or transacting with, cryptocurrencies, you first need to understand how this ecosystem works. Coming to the fundamentals, cryptocurrency is an unregulated asset, usually exchanged or transacted on a cryptocurrency exchange platform. These platforms offer investment options similar to those available for traditional stock trading setups that investors are familiar with. Cryptocurrencies and non-fungible tokens (NFTs), among other virtual digital assets (VDAs), are typically stored in digital wallets. These wallets may be linked to a particular exchange or offered by another service provider, which is neither an exchange itself, nor the underlying technology on which VDA is based.
Amidst all the cautionary advisories issued by the government in view of the risks associated with technology, end users should be familiar with what they can expect from these service providers and online platforms.
While there is no law that governs the ecosystem, an investor is not left without redress at all. Investors can still rely on the rights that are provided under information technology laws to: (i) redress complaints through an established mechanism provided by the provider; (ii) expect your data to be safe and secure in the online environment and transactions; (iii) To be able to take recourse against cyber crimes anywhere between fraud and theft of finances to identify the theft and any phishing related concerns (this is also a solution under the criminal laws through the Indian Penal Code) will find); (iv) to be able to make changes to their profile registration, including the updating and correction of their banking information and other personal information.
Users are permitted to withdraw their consent to the continued processing of their data, flowing from the obligations under applicable data privacy laws; This can enable the user to terminate his relationship with the crypto platform and demand the deletion of his profile.
A consumer in India also has the following rights: (i) to be heard; (ii) prevention; (iii) security; (iv) to be informed; (v) Consumer education in all sectors. Additionally, under consumer laws, Users must be provided with all information necessary to arrive at a reasonable decision regarding the Platform’s offerings. Taking lessons from the US Securities Exchange Commission and SEBI, the Central Consumer Protection Authority has also recently issued separate guidelines for monitoring and regulating advertisements. This will also be applicable to the platforms involved in VDA transactions.
In addition to the statutory rights discussed herein, Users are governed by the specific terms and conditions of the Cryptocurrency Platform, Digital Wallet, hence levied by the User for cryptocurrency related transactions. The terms and conditions of each Platform shall be dependent on the products and services offered, and shall be specific to the Service Provider, without comparison with any other Platform or Service Provider. Some platforms such as Coinbase, CoinSwitch, Binance and CoinDCX have worked hard to educate their users and enable the consumer to be aware of the associated perks, and shortcomings of service and product offerings. Users are requested to review the terms and conditions of any products/services available online to understand the risks, benefits and limitations of contracting with such agencies.
It is important to understand here that as this market is unregulated, the reliance on laws is derived from an environment of information technology (intermediary, data privacy and security) laws, consumer protection laws, contractual obligations and penal codes.
Since there is a direct contract between the Platform and the End User, certain rights that are granted to you as a User, except as mandated under law, are at the exclusive discretion of the Service Provider, the particular Platform.
Abhishek Malhotra is the Managing Partner at TMT Law Practice.
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