The recent year’s crackdown on the cryptocurrency sector in India has benefited international exchanges at the expense of domestic exchanges. According to the most recent sources, Binance, a cryptocurrency exchange, is growing its presence in the Indian market.
This occurs as Indian cryptocurrency traders seek refuge on overseas exchanges to escape the onerous 1% TDS on cryptocurrency transactions. Added to the 30% tax paid on cryptocurrency earnings is this 1% tax. According to data from market intelligence company Sensor Tower, the number of downloads for the Binance app increased to 429,000 over the final month of August 2022.
Indian cryptocurrency investors have been drawn to Binance by the country’s high taxation and challenges with money transfers. On the Indian cryptocurrency market, the daily transaction volumes have fallen by 90% since the 1% tax took effect in July. However, foreign rivals of Indian exchanges have been rapidly expanding there.
This is a result of cryptocurrency transactions not having taxes deducted by exchanges like Binance and FTX. As a result, it is strongly encouraging Indian investors to switch to overseas exchanges. According to Rohan Misra, CEO of SEBA India, to Bloomberg:
“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”.
A spokeswoman for Binance stated that the company is keeping an eye on the situation and will make more statements as needed.
Binance’s Spat With WazirX
Following an ED inquiry, Binance got into a spat with WazirX, the most popular cryptocurrency exchange in India. Binance disassociated itself from WazirX, despite the latter’s claims to support it. Customers of WazirX migrated to Binance as a result. Downloads of WazirX fell from 596,000 in January to 92,000 in August.
Banks discontinuing their relationships with WazirX has significantly decreased the amount of funds arriving at the exchange. Sam Bankman-FTX Fried’s exchange, which competes with Binance, received 96,000 and 52,000 downloads in India, respectively, in July. From 40,000 downloads in January, this number increased.