The term "virtual currency" refers to a medium of exchange existing entirely in intangible form that is not a legal tender but can be substituted for legal tenders. Older forms of "currency" that are not "legal tender" include paper-based currency substitutes, such as military scrip and depression scrip. In recent times, the term "virtual currency" has developed an added connotation that it exists only in an electronic or digital form and is used only as a medium of exchange A subset of virtual currency is "crypto currency," by which we mean an internet-based virtual currency in which the ownership of a particular unit of value is validated using cryptography. Its value varies by its movement in the market. As against commodity based currencies which derives its intrinsic value through the central authority, crypto currencies are not legal tender and, thus, their use requires the agreement among parties for a transaction. For example, Bitcoins have no physical presence and their ownership is by entries .Recently Securities and Exchange Board of India’s (SEBI) formed ‘Committee on Financial and Regulatory Technologies (CFRT)’ which suggested that it is crucial to regulate transactions involving crypto currencies to ensure that India’s public issue norms are not breached.