In recent years, the popularity of trading apps has skyrocketed in India. These apps allow individuals to buy and sell stocks, commodities, and currencies from the comfort of their own homes. However, not all trading apps are legal in India. In fact, there are several apps that have been deemed illegal by the Indian government. In this article, we will explore which trading apps are illegal in India and why.
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The Rise of Trading Apps in India
Before we dive into the illegal trading apps, let's first understand why these apps have become so popular in India. With the rise of technology and the internet, more and more people are turning to online platforms for their financial needs. Trading apps offer convenience, accessibility, and the potential for high returns, making them an attractive option for many Indians.
Additionally, the COVID-19 pandemic has also played a role in the surge of trading app users. With lockdowns and restrictions in place, people have had more time on their hands and have turned to trading as a way to make extra income. This has led to a significant increase in the number of trading app users in India.
The Legal Trading Apps in India
Before we discuss the illegal trading apps, it's important to note that there are several legal trading apps available in India. These apps are regulated by the Securities and Exchange Board of India (SEBI) and follow all the necessary guidelines and regulations set by the government. Some of the popular legal trading apps in India include Zerodha, Upstox, and 5Paisa.
Zerodha
Zerodha is one of the largest and most popular trading apps in India. It offers a wide range of investment options, including stocks, mutual funds, and bonds. The app is known for its low brokerage fees and user-friendly interface, making it a top choice for many traders in India.
Upstox
Upstox is another popular trading app that offers a variety of investment options. It also has a simple and easy-to-use interface, making it a favorite among beginners. Upstox is known for its low brokerage fees and fast execution of trades, making it a reliable option for traders.
5Paisa
5Paisa is a discount broker that offers trading services at a lower cost compared to other apps. It offers a wide range of investment options, including stocks, mutual funds, and insurance. The app also provides educational resources for beginners to learn about trading and investing.
Illegal Trading Apps in India
While there are several legal trading apps in India, there are also some apps that have been deemed illegal by the government. These apps have been banned due to various reasons, including fraudulent activities, unauthorized trading, and lack of proper regulations. Let's take a look at some of these illegal trading apps.
Money Trade Coin (MTC)
Money Trade Coin (MTC) was launched in 2017 and claimed to be India's first cryptocurrency-based trading platform. However, the Reserve Bank of India (RBI) declared all cryptocurrencies as illegal in India in 2018, leading to the ban of MTC. The app was accused of running a fraudulent scheme and deceiving investors, resulting in a loss of over Rs. 500 crore.
EzPlan
EzPlan was a mobile app that offered investment advice and portfolio management services. However, the app was found to be operating without proper authorization from SEBI and was banned in 2019. The app was accused of providing misleading information and charging high fees from users.
NSE NOW
NSE NOW was a trading app launched by the National Stock Exchange (NSE). However, the app was banned in 2016 due to security concerns. It was found that the app was not following the necessary security protocols, making it vulnerable to cyber attacks.
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How to Identify Illegal Trading Apps
With so many trading apps available in the market, it can be challenging to identify which ones are illegal. Here are a few things to look out for when choosing a trading app:
FAQs
Q: Are all trading apps legal in India?
A: No, there are some trading apps that have been banned by the Indian government due to fraudulent activities or lack of proper regulations.
Q: Can I get my money back if I have invested in an illegal trading app?
A: It depends on the specific case. If the app has been banned due to fraudulent activities, it may be difficult to recover your money. However, if the app has been banned due to lack of regulations, you may be able to get your money back through legal channels.
Q: What should I do if I have invested in an illegal trading app?
A: It's best to seek legal advice and report the app to the appropriate authorities. You can also try to recover your money through legal means.
Q: How can I protect myself from falling victim to an illegal trading app?
A: Do thorough research before investing in any trading app. Check if the app is registered with SEBI and has good reviews from other users. Avoid apps that make unrealistic promises or ask for personal information.
Q: Is cryptocurrency trading legal in India?
A: No, the RBI has declared all cryptocurrencies as illegal in India. Therefore, any trading app that deals with cryptocurrencies is also considered illegal.
Conclusion
In conclusion, while trading apps offer convenience and accessibility, it's essential to be cautious when choosing one. Always opt for apps that are registered with SEBI and have good reviews from other users. Avoid apps that make unrealistic promises or ask for personal information. By being aware of the illegal trading apps in India and following the necessary precautions, you can protect yourself from falling victim to fraudulent activities.
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