The number of Indian users on the Binance cryptocurrency exchange has skyrocketed after the Indian government started levying taxes on crypto transactions. Meanwhile, daily trading volumes on some major India-based cryptocurrency exchanges have fallen by more than 90% since the new tax rules came into force.
Binance sees record number of Indian users
The number of Indian user registrations soared on global crypto exchange Binance after a 1% withholding tax (TDS) took effect in July, Bloomberg reported on Tuesday.
The number of Binance app downloads in India rose to 429,000 in August, the publication added, noting that this number is the highest this year. In contrast, daily trading volumes on several major India-based cryptocurrency exchanges have reportedly fallen by more than 90% since the 1% TDS went into effect.
Commenting on the new tax, Rohan Misra, CEO of SEBA India, a subsidiary of SEBA Bank AG, based in Switzerland, said:
Recent tax regulations do not explicitly state whether the 1% withholding tax extends to crypto derivatives transactions involving futures contracts, as it does for spot crypto transactions.
The 1% TDS is levied in addition to a new 30% tax on gains from crypto assets. Also, losses from crypto trading cannot be offset by income. Indian crypto exchanges also face limited support from the banking system, which makes it difficult for users to transfer money to and from trading platforms.
Another foreign-based cryptocurrency exchange, FTX, has seen an increase in app downloads since January but not since July. The exchange saw around 40,000 downloads in India in January, nearly 96,000 in July and 52,000 in August.
Nasdaq-listed crypto exchange Coinbase Global Inc., however, saw its app downloads in India drop to 16,000 in August from nearly 31,000 in June. Coinbase tried to expand its operations in India in April, but soon encountered problems with the UPI payment system.
While Binance’s app downloads have skyrocketed, some major Indian cryptocurrency exchanges are seeing a decline in user registrations, the post said. Indian crypto exchange Coindcx’s app downloads fell 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 drop to 92,000 in August from around 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 India’s Directorate of Law Enforcement (ED) in early August, but were unfrozen earlier this week.
As to whether Binance has started collecting transaction tax from users in India, a spokesperson for the exchange told the outlet that the company is “currently monitoring the situation and will make further announcements in due course.”
What do you think of Indian cryptocurrency investors choosing to use Binance? Let us know in the comments section below.
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