After the Indian government started taxing crypto transactions, the number of Indian users on the cryptocurrency exchange Binance has increased. Meanwhile, daily trading volumes at some of the leading India-based cryptocurrency exchanges are down over 90% since the new tax rules went into effect.
Binance sees record number of Indian users
Bloomberg reported on Tuesday that the number of Indian user sign-ups on global crypto exchange Binance increased after 1% tax at source (TDS) was implemented.
The number of Binance app downloads in India rose to 429,000 in August, noting that the number is the highest this year. In contrast, daily trading volumes are down over 90% across several major India-based cryptocurrency exchanges since the 1% TDS went into effect.
Commenting on the new tax, Rohan Mishra, CEO, SEBA India, a subsidiary of Swiss-based SEBA Bank AG, said:
Recent tax regulation is not clearly clear whether the 1% tax deducted at source extends to crypto derivatives transactions involving futures, as is the case for crypto spot transactions.
1% TDS is levied on top of the new 30% tax on gains from crypto assets. Furthermore, crypto trading losses cannot be offset against earnings. Indian crypto exchanges are also facing limited support from the banking system, making it difficult for users to move money in and out of the trading platform.
Another foreign-based cryptocurrency exchange, FTX, saw an increase in its app downloads since January, but not since July. The exchange saw about 40,000 downloads in India in January, around 96,000 in July and 52,000 in August.
However, Nasdaq-listed crypto exchange Coinbase Global Inc., saw its app downloads in India jump to 16,000 in August, up from around 31,000 in June. Coinbase tried to expand its operations in India in April, but quickly ran into trouble with the UPI payment system.
While Binance’s app downloads soared, some of the major Indian cryptocurrency exchanges are seeing a decline in the number of user sign-ups, the publication reported. Indian crypto exchange Coindcx’s app downloads dropped from 2.2 million in January to 163,000 in August, according to data from market intelligence firm Sensor Tower.
Another Indian crypto exchange, Wazirx, saw its monthly app downloads drop from around 596,000 in January to 92,000 in August. The exchange recently had a public dispute with Binance CEO Changpeng Zhao (CZ) over its ownership, prompting Zhao to encourage Wazirx users to transfer funds to Binance. Wazirx’s bank accounts were frozen by the Indian Enforcement Directorate (ED) in early August, but they were frozen earlier this week.
Regarding whether Binance has started collecting transaction taxes from users in India, a spokesperson for the exchange told the news outlet that the company is “currently monitoring the situation and will make further announcements in due course.”
What do you think about Indian cryptocurrency investors who choose to use Binance? Let us know in the comments section below.
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