Maharashtra Legislature Passes Amendment to Bring Virtual Digital Assets Under Depositor Protection Law

The Government of Maharashtra will create financial monitoring units in all districts to track down fraudulent investments that offer returns that are too good to be true. Minister of State for Home Affairs, Yogesh Kadam, revealed this in the State Legislature on Wednesday. In response to the debate regarding the Maharashtra Protection of Interests of Depositors (in Financial Establishments) (Amendment) Bill, 2026, Kadam stated that the surveillance units proposed in the bill would closely monitor such suspicious financial organisations and help in taking action before depositors get cheated.

Bill Introduces Faster Recovery Process for Fraud Victims

As per a Times of India report, the law is inclusive of cryptocurrencies, non-fungible tokens (NFTs), as well as any electronic form of value that can be exchanged. Previously, under the MPID Act, the existing authority would attach property that resulted from deposits, except the fact that digital assets were not specifically included. This caused confusion, where the assets would get converted into digital form by any fraudulent person. Now, however, it is possible for the agencies to trace, attach, evaluate, and sell such assets.

According to the minister, the amendments are intended to improve the efficiency of legal processes, reducing the number of adjournments to two; one further adjournment would only be granted under exceptional circumstances. He further added that the Bill also covers virtual digital assets and cryptocurrencies within its purview, allowing authorities to claim back victims' losses on the basis of the market value of crypto assets rather than freezing them all the time.

However, the amendment neither makes cryptocurrency a legal tender nor introduces any licensing scheme for the Indian crypto assets industry. Rather, it enhances the recovery mechanism that exists within a deposit protection regime. The effectiveness of such enforcement will ultimately rely upon the ability of the investigating authorities to track down wallets, secure digital assets, and sell off volatile tokens. 

In October 2025, India took a significant step towards crypto adoption when the Madras High Court recognised crypto as property. The judgment marked the first time an Indian court had directly classified cryptocurrency as a form of property, giving investors and businesses a firmer legal footing for transactions and dispute resolution. 

In September 2025, the country had secured the first spot in Chainalysis's 2025 Global Crypto Adoption Index for the third year in a row. The report showcased India's growing dominance in crypto usage, even as traders in the country deal with regulatory uncertainty and taxation challenges. This report, which analyses crypto adoption across 151 countries, highlighted India's vast untapped potential in the cryptocurrency and blockchain sectors.