Crypto ads are back in full force. Four years ago, India imposed a tax regime that looked like a ban, but over time, punters have come to accept the 1% tax deducted at source (TDS) as routine. My screens are now full of ads for the so-called crypto exchanges again, and I'm sure yours are too. More than 50 crypto platforms (Virtual Digital Asset Service Providers, or VDASPs) have registered, and the government's own estimates are that almost 40 million people have invested in crypto.
I'd like to set this against two recent developments in the crypto world. The first concerns US President Donald Trump. When Trump's 2026 financial disclosures were published, it was revealed that he had earned more than $1.4 billion from various crypto ventures. These include a memecoin (look it up!) in his name and a family firm with the clever name 'World Liberty Financial', whose token sales and other crypto activities generated hundreds of millions of dollars in income.
Worse, from an ethical perspective, the Abu Dhabi sovereign wealth fund and Binance are involved, and somewhere along the line, the Binance founder was pardoned by Trump over money-laundering failures at Binance, after pleading guilty to failing to maintain the controls required by US law. Trump denies the two are connected. The price of the memecoin issued by the Trump company reached $74 and is now below $2. The money did not simply vanish: investors lost market value as the token collapsed, while Trump-linked entities had already earned substantial revenues from the crypto business.
How, you may ask, is this relevant to you and me in India? Step back and look at what's happening here. The US is the world's financial and regulatory superpower, and its President is the head of this machinery. How deeply crypto gets embedded in the world's financial system depends heavily on the US government's attitude towards it. If the head of the government is brazenly involved in every kind of shady crypto activity, what hope is there that crypto will be well-regulated globally?
Let's look at the other end of the crypto story now: a Canadian company called Coinkite and a device it makes called Coldcard. This device is widely used, and likely has many users in India as well. Coldcard is a hardware wallet, a small, standalone device that generates and holds a person's Bitcoin secret keys offline, so owners can keep their coins in their own custody rather than trusting an exchange. This has always been seen by hardcore crypto faithful as the safest way to store your bitcoin because, as you must have read, exchanges keep getting hacked.
A few weeks ago, Coldcard's reputation collapsed. It turned out that for over five years, a bug in Coldcard's software had been generating secret keys that were easy to guess with only modest computing power. On 30 July, attackers emptied thousands of Coldcard wallets within minutes. The total is said to be well over $100 million.
Trump and Coldcard appear to be unrelated, but they actually affect the small saver with the same problem: you are required to trust a machine that you cannot see, control or understand. Unlike so many other forms of investment, you just have to blindly trust something with nothing backing that trust. In both cases, nothing looked wrong until everything was gone. The memecoin buyer watched a number climb to $74 and thought it was wealth. The Coldcard owner held a device that assured him his coins were safe. Neither could see the thing that would ruin them until it had already done so. This is what happens when you are asked to trust a system you are not allowed to inspect. And if you are one of the 40 million who have already put money in, or one of the many more these new ads are chasing, that saver is not some figure in a story from America or Canada. It is you.
A big reason that the normal regulated system works is that you don't need to understand the deep details yourself. Independent regulators like depositories, auditors, and central banks with real teeth stand behind it. The crypto universe claims not to be subject to any of this but replaces it with nothing useful. With each cycle of hype and bust, crypto presents a shinier, more polished and yet more hollow facade. The latest version may come with Trump's blessings and invite you to bet on it. Make sure you decline the invitation.
Dhirendra Kumar is founder and chief executive officer of Value Research, an independent investment advisory firm.