Crypto exchanges and Web3 platforms sit on a tension: heavy KYC and transaction monitoring on one side, user expectations of privacy on the other. Under the DPDP Act, exchanges are Data Fiduciaries handling sensitive identity and financial data, and scale can make them SDFs.
KYC and identity data
KYC documents, selfies and PAN are personal data collected for a compliance purpose — don't reuse them for marketing or analytics without a basis. Secure them strongly.
Transaction and on-chain data
Linking wallet activity to an identity creates personal data. Minimise what you retain off-chain, and be transparent about monitoring.
Security is existential
Exchanges are prime breach targets; Rule 6 safeguards (encryption, access control, one-year logs) and a tested breach plan are non-negotiable.
A crypto checklist
- Purpose-limit KYC data; no silent reuse
- Minimise off-chain identity-linked data
- Strong security; breach readiness
- Notices and rights handling for users
- Prepare for SDF duties at scale
How DPDP Bridge helps
DPDP Bridge helps exchanges separate KYC compliance from marketing, secure identity data, and stand up breach and SDF readiness. Take the free assessment to see exactly where you stand and what to do next.
This article is general information about the DPDP Act and is not legal advice. For guidance specific to your organisation, take the free assessment or speak to our team.