The number of Indian users on the cryptocurrency exchange Binance has soared after the Indian government began to impose taxes on cryptocurrency transactions. Meanwhile, daily trading volumes at some of the major India-based cryptocurrency exchanges have fallen by more than 90% since the new tax rules went into effect.
Binance sees a record number of Indian users
The number of Indian user registrations has soared on global cryptocurrency 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 have declined 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 regulation is not explicitly clear as to whether the 1% tax deducted at source extends to crypto derivative transactions involving futures, as well as to spot cryptocurrency transactions.
The 1% TDS is levied in addition to a new 30% tax on cryptocurrency earnings. Furthermore, losses in cryptocurrency trading cannot be compensated for with income. Indian cryptocurrency 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 cryptocurrency exchange based abroad, FTX, has seen an increase in app downloads since January but not July. The exchange recorded around 40,000 downloads in India in January, nearly 96,000 in July and 52,000 in August.
Nasdaq-listed cryptocurrency exchange Coinbase Global Inc. saw app downloads in India plummet to 16,000 in August from nearly 31,000 in June. Coinbase tried to expand its operations in India in April, but immediately ran into problems with the UPI payment system.
While Binance’s app downloads have soared, some of India’s major cryptocurrency exchanges are seeing a drop in the number of user signups, the publication reported. According to data from market analyst Sensor Tower, Indian cryptocurrency exchange Coindcx’s app downloads dropped to 163,000 in August from 2.2 million in January.
Another Indian cryptocurrency 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 the Indian Enforcement Directorate (ED) in early August, but were cleared earlier this week.
Regarding Binance starting to collect transaction tax from users in India, a spokesperson for the exchange told the news that the company “is currently monitoring the situation and will make further announcements in due course.”
What do you think of Indian cryptocurrency investors who choose to use Binance? Let us know in the comments section below.
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