Indian cryptocurrency exchanges are experiencing difficulties. They have reached the point where they are in danger of going out of business. Their management is doing everything it can to keep the companies afloat, but these difficult times have come as a result of the bear market and decisions made by local authorities.
Executives at India's largest stock exchanges said they were in 'survival mode'. So they had to cut costs, renegotiate contracts with partners, stop pay rises and let staff go in a few rounds. Moreover, they were looking for new ways to generate revenue and were also rebranding.
Representatives from six well-known Indian cryptocurrency exchanges reported that they have been operating for two to four years and are currently experiencing their most difficult period. This is mainly due to a sharp decline in the value of known cryptocurrencies, as well as a decrease in trading volume, which has led to an overall decline in fees for these platforms.
After the collapse of FTX, clients became increasingly wary of centralised services, which made matters worse.
Even before that, the Indian stock market had run into difficulties. On February 1, 2022, the government announced stricter tax laws, imposing a 30 per cent tax on cryptocurrency transactions and levying a 1 percent withholding tax (TDS) on all trading activities.
This immediately caused outrage from industry leaders, who argued that it would lead to an outflow of cryptocurrencies from India. Soon after the law was introduced, crypto-trading volumes dropped significantly, and then the government imposed a 'shadow ban' that made it impossible for local payment systems to connect to crypto-exchanges. This created an even more difficult situation, which company executives have been trying to overcome ever since.