India’s financial ecosystem is staring at a new digital adversary—cryptocurrency. The recently published Digital Threat Report 2024 by CERT-In, CSIRT-Fin, and SISA lays bare an alarming reality: crypto cybersecurity risks in India are not just emerging, they’re accelerating. The report reveals that India saw a 400% increase in crypto-related fraud cases in the past year alone, with over 1,200 incidents targeting financial institutions and crypto platforms between January and October 2024, as recorded by the Indian Cyber Crime Coordination Centre (I4C). With the average cost of a data breach reaching an all-time high of $4.88 million globally—a 10% rise from 2023—and $2.18 million in India, the financial stakes have never been higher.

The Quiet Shift No One Saw Coming

For years, Bitcoin was the go-to name in cyber heists. But not anymore. Cybercriminals are now leaning toward privacy-first cryptocurrencies like Monero. Unlike Bitcoin, which offers some level of traceability, Monero completely hides wallet addresses, transaction values, and the identities involved.

That makes Monero a hacker’s dream. Monero is a privacy-centric cryptocurrency that uses advanced cryptographic techniques—like ring signatures, stealth addresses, and confidential transactions—to obscure the sender, recipient, and transaction amount. Unlike Bitcoin, Monero leaves no transparent trail, making it virtually untraceable and highly attractive for laundering stolen funds or conducting illicit transactions.

The shift to privacy coins is not about preference; it’s about evading detection. Law enforcement agencies are facing a brick wall when it comes to tracing stolen assets. And this shift has redefined the nature of crypto cybersecurity risks in India.

Breach of Trust: The WazirX Wake-Up Call

In July 2024, WazirX, one of India’s largest crypto exchanges, was hit by a sophisticated cyberattack. The intruders—allegedly backed by the Lazarus Group—exploited vulnerabilities in the platform’s multi-signature wallet system and siphoned off $234.9 million worth of crypto assets.

If that figure doesn’t grab your attention, here’s the kicker: It took weeks before the breach was even detected. That’s how advanced and invisible these attacks have become.

This single event exposed the gaping holes in even well-established platforms and magnified the urgency of addressing crypto cybersecurity risks in India.

Not Just Theft—It’s Infiltration

Gone are the days when cybercriminals relied on simple malware or phishing attacks. Today, we’re seeing a disturbing fusion of AI with crypto exploits. Deepfakes, prompt-injection hacks, and large language model manipulation are making it almost impossible to distinguish real from fake.

Imagine a deepfake video of your CFO authorizing a funds transfer. That’s not science fiction anymore. It’s happening.

These attacks aren’t just about stealing crypto. They target the trust layer in financial institutions. And that’s why the crypto cybersecurity risks in India are unlike any we’ve dealt with before.

How AI Is Making It Worse

The report warns against the irresponsible use of AI in the BFSI sector (Banking, Financial Services, and Insurance). Tools like FraudGPT and WormGPT are designed to automate cyberattacks, making it easier for attackers to carry out sophisticated campaigns with minimal effort. These generative AI tools can adapt in real-time, bypass traditional detection systems, and generate highly targeted social engineering attacks. The increasing accessibility of such tools significantly widens the attack surface, especially in high-risk sectors like BFSI, further escalating the crypto cybersecurity risks in India.

• Write convincing phishing emails 
• Create sophisticated malware 
• Break into systems using natural language prompts

And the worst part? They’re cheap, accessible, and effective.

These new-gen attacks are specifically engineered to exploit the operational complexity of banks and fintechs—making crypto cybersecurity risks in India a challenge that traditional firewalls and antivirus software simply cannot handle.

Vulnerabilities Hidden in Plain Sight

One of the key takeaways from the report is how APIs in AI-native applications have become soft targets for sophisticated threat actors. Developers often overlook the importance of rigorous end-to-end security testing, assuming that encrypted communication layers or authentication protocols offer sufficient protection. However, the report reveals that poorly secured APIs were responsible for several major breaches in the Indian BFSI sector in 2024, enabling unauthorized access to sensitive data and transaction workflows. Attackers now target business logic flaws and exploit insecure integrations to move laterally within systems. Without regular auditing, rate limiting, and threat modeling, APIs act as open doors rather than secure gateways—subtly amplifying the impact of crypto cybersecurity risks in India.

Weak API security creates a silent backdoor, allowing hackers to breach systems without raising alarms. It’s like leaving a window open in a fortress.

This silent vulnerability is rapidly fueling crypto cybersecurity risks in India, especially among institutions racing to launch AI features without adequate safeguards.

What Needs to Happen (Now)

The report doesn’t just sound alarms; it offers actionable insights backed by CERT-In, SISA, and CSIRT-Fin’s analysis:

• Regulate AI Now: India needs a unified legal and operational framework that governs the deployment of AI and machine learning in the BFSI sector. The report specifically urges regulatory bodies like SEBI, RBI, and MeitY to draft AI compliance standards. 
• Prioritize API Security: According to the Digital Threat Report 2024, insecure APIs are the most common entry points for financial sector breaches. Fintech APIs must undergo frequent red-team testing and vulnerability assessments. 
• Deploy Anomaly Detection: Tools using machine learning for behavior analytics and real-time monitoring can significantly reduce dwell time—currently averaging over 200 days in undetected breaches in India. 
• Educate and Simulate: CERT-In recommends mandatory employee cyber awareness programs and quarterly attack simulations to fortify frontline defenses. 

Each of these steps tackles the growing threat of crypto cybersecurity risks in India by building resilience, not just reaction.

The Road Ahead: Where Vigilance Must Meet Velocity

India’s financial institutions are standing at a pivotal intersection—where digital innovation collides with unprecedented risk. Cryptocurrencies like Monero have blurred the lines of traceability, and AI has accelerated the pace and precision of cyberattacks.

This isn’t just an arms race; it’s a test of strategy, speed, and foresight. Defending against crypto cybersecurity risks in India requires more than compliance—it demands a culture of proactive cybersecurity, informed leadership, and tech that evolves faster than the threats it faces. The battle against crypto cybersecurity risks in India is already underway. The war is digital. The threat is invisible. The time to act is now. The only question is: Are we ready to fight smart?