Engaging in transactions on a banned platform exposes users to significant financial risks. Without the protections offered by legal frameworks, users may become susceptible to fraud or theft, with limited avenues for recovery.

2) 

Many exchanges explicitly prohibit VPN usage in their terms of service. Breaching these terms might lead to account suspension or closure, as it can be considered a violation.

2. **Regulatory Compliance:** Exchanges adhere to regulatory requirements and anti-money laundering (AML) laws. VPN usage might hinder compliance with know-your-customer (KYC) and AML policies, potentially leading to account verification issues or even suspension.

3. **Suspicious Activity:** VPNs might trigger suspicion as they obscure IP addresses, potentially raising red flags for exchanges monitoring for fraudulent or suspicious behavior, leading to account investigations or freezes.

3) using a VPN to access an exchange may be considered a form of tax evasion or money laundering.

Cryptocurrencies as a payment medium in India are not regulated by any central authority. There are no rules and regulations or any guidelines laid down for settling disputes while dealing with cryptocurrency. So, trading in cryptocurrency is done at investors' risk.

Cryptocurrency exchanges like Binance, Kraken, Kucoin and others were banned in India by the FIU. The Director FIU IND wrote to the Secretary of Meity to block these exchanges as they were illegally operating without following the provisions of the PML Act in India.

it is legal to trade and invest in Bitcoin in India as the sector is unregulated, but Bitcoin is not legal tender in the country.

The consequences of investing in crypto through banned exchanges in India could be severe. If caught, you could face legal action, financial penalties, and even imprisonment. The Reserve Bank of India (RBI) has issued multiple warnings against investing in cryptocurrencies, including through illegal exchanges, and has directed banks to cease providing services to entities dealing or transacting in cryptocurrencies.

Additionally, the Indian government has proposed a bill that seeks to ban all private cryptocurrencies, including Bitcoin, in India and criminalize any related activities. The bill is currently under review, but if passed, it would make investing in cryptocurrencies through illegal exchanges even more risky.

It is always advisable to follow the laws and regulations governing cryptocurrency transactions in your country to avoid any legal repercussions.

Regards,

Arunkumar Khedia

Advocate Bombay High Court

You can get into income tax and other RBI complications in this there will be no penal provisions

Dear Client,

Using VPN to bypass restrictions may violate Indian laws and regulations related to crypto currency trading. The Indian government has taken a cautious approach towards crypto currencies and has imposed restrictions on trading and using them. The Reserve Bank of India (RBI) has issued warnings against dealing with crypto currencies through unauthorized channels, and there may be legal consequences for violating these warnings. Funds held in accounts on these exchanges may be at risk. If the government cracks down on these exchanges or if they face regulatory issues, there is a possibility of losing access to your funds. Since these exchanges operate outside of India's regulatory framework, there may be fewer protections for investors, and disputes or issues with transactions may be more challenging to resolve. If caught, you may face penalties, fines, or other punitive actions from regulatory authorities. The exact punishment can vary depending on the severity of the violation and may include fines, seizure of assets, or legal action. It's essential to understand that while using a VPN might help you bypass restrictions temporarily, it does not guarantee anonymity or protection from legal consequences. Additionally, the crypto currency landscape is constantly evolving, and regulations may change, potentially increasing the risks associated with trading on banned platforms.

- Legally, the VPN is not been banned in India. 

- However, as per the Reserve Bank of India, cryptocurrencies lack underlying value and therefore cannot be considered as currencies. 

- Further, the offshore exchanges like Binance, Bitstamp, Kucoin, Huobi, MEXC Global, Kraken, Gate.io, Bitfinex and Bittrex are banned in India  due to their disobedience of Indian anti-money laundering regulations.

- Further, 30% crypto tax is levied when trading crypto. Exchanging

- Hence, using a VPN to access a banned platform violates the Indian laws due to their non - compliance of Tax Deducted at Source (TDS) provisions.