The number of Indian users on cryptocurrency exchange Binance has soared after the Indian government began levying taxes on crypto transactions. Meanwhile, daily trading volumes at some major India-based cryptocurrency exchanges are down over 90% since the new tax rules took effect.
Binance Sees Record Number of Indian Users
The number of Indian user sign-ups soared on global crypto exchange Binance 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 contrast, daily trading volumes at several major India-based cryptocurrency exchanges are reportedly down over 90% since the 1% TDS took effect.
Commenting on the new tax, Rohan Misra, CEO at SEBA India, a subsidiary of Swiss-based SEBA Bank AG, opined:
The recent tax regulation is not explicitly clear on whether the 1% tax deducted at source extends to crypto derivatives transactions involving futures, as it does to crypto spot transactions.
The 1% TDS is levied on top of a new 30% tax on gains from crypto assets. Moreover, crypto trading losses cannot be offset against income. Indian crypto exchanges are also facing limited support from the banking system, making it difficult for users to move money in and out of trading platforms.
Another foreign-based cryptocurrency exchange, FTX, saw a rise in its app downloads since January but not since July. The exchange saw 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, saw its app downloads in India tumble to 16,000 in August from almost 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 major 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 data from market intelligence firm Sensor Tower.
Another Indian crypto exchange, Wazirx, saw its monthly app downloads fall to 92,000 in August from about 596,000 in January. 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 were unfrozen earlier this week.
Regarding whether Binance has started collecting the transaction tax 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.”