The number of Indian users on cryptocurrency exchange Binance has soared after the Indian authorities began levying taxes on crypto transactions. In the meantime, daily trading volumes at some main India-based cryptocurrency exchanges are down over 90% because the new tax guidelines took impact.
Binance Sees Record Number of Indian Users
The number of Indian user sign-ups soared on global crypto exchange after a 1% tax deducted at source (TDS) went into effect in July, Bloomberg reported Tuesday.
The number of Binance app downloads in India jumped to 429,000 in August, the publication added, noting that this number is the highest this year. In distinction, daily trading volumes at several major India-based cryptocurrency exchanges are reportedly down over 90% because the 1% TDS took impact.
Commenting on the new tax, Rohan Misra, CEO at SEBA India, a subsidiary of Swiss-based SEBA Bank AG, opined:
The latest tax regulation is not explicitly clear on whether the 1% tax deducted at source extends to crypto derivatives transactions involving futures, because it does to crypto spot transactions.
The 1% TDS is levied on high of a new 30% tax on gains from crypto assets. Furthermore, crypto trading losses can’t be offset against earnings. Indian crypto exchanges are additionally facing limited support from the banking system, making it difficult for customers to move money in and out of trading platforms.
Another foreign-based cryptocurrency exchange, FTX, noticed an increase in its app downloads since January but not since July. The exchange noticed about 40,000 downloads in India in January, almost 96,000 in July, and 52,000 in August.
The Nasdaq-listed crypto exchange Coinbase Global Inc., however, noticed its app downloads in India tumble to 16,000 in August from almost 31,000 in June. Coinbase tried to develop its operations in India in April but quickly ran into trouble with the UPI payment system.
Whereas Binance’s app downloads soared, some main Indian cryptocurrency exchanges are seeing declines in the number of user sign-ups, the publication conveyed. Indian crypto exchange Coindcx’s app downloads dwindled to 163,000 in August from 2.2 million in January, according to knowledge from market intelligence agency Sensor Tower.
Another Indian crypto exchange, Wazirx, noticed its month-to-month app downloads fall to 92,000 in August from about 596,000 in January. The exchange recently had a public dispute with BinanceCEO Changpeng Zhao (CZ) over its possession, prompting Zhao to encourage Wazirx customers to switch funds to Binance. Wazirx’s bank accounts were frozen by the Indian Enforcement Directorate (ED) in early August however have been unfrozen earlier this week.
Relating to whether Binance has started collecting the transaction tax from users in India, a spokesperson for the exchange informed the news outlet that the corporate “is currently monitoring the scenario and can make additional bulletins in the end.”