Due Diligence In The Acquisition Of Blockchain Startups: Legal And Regulatory Challenges In India
- IJLLR Journal
- Apr 24
- 1 min read
Prerana Kumari, Amity University, Noida
ABSTRACT
The growth of blockchain-based startups and cryptocurrency enterprises has reshaped how mergers and acquisitions are carried out. These companies function through distributed systems, token-driven models, self-executing contracts, and cross-border digital networks, which introduces significant legal complexity to their acquisition. Standard due diligence approaches, which were created for traditional businesses, often fall short when trying to uncover hidden risks in crypto-related deals. This paper looks at the legal and regulatory problems that come up when purchasing blockchain startups, with particular attention to the situation in India. It makes the case that a buyer must look into not just the corporate framework and financial statements, but also token categorization, smart contract reliability, cybersecurity vulnerabilities, regulatory adherence, tax liabilities, and anti- money laundering responsibilities. The paper also emphasises the importance of combined due diligence frameworks and specialised contractual safeguards to minimise risks after the acquisition.
