Indian crypto exchanges have been under pressure to decline after the entry into force of the tax on crypto assets.
After major Indian exchanges witnessed a sharp drop in trading volume after the 30 percent tax on profits took effect on April 1, the industry is now facing additional pressure after the introduction of another new tax, which took effect last Friday. As a result, trading volume on large platforms decreased by about 95%.
According to some reports, the daily trading volume on the WazirX cryptocurrency exchange, supported by Binance, fell by more than 63% to $5.36 million on July 1 from $14.53 million a day earlier. For another exchange, CoinDCX, volumes decreased by about 20% over the same period.
The sharp decline in trading activity is due to the latest 1% tax imposed by the Reserve Bank of India (RBI) on the sale and transfer of crypto assets in excess of $127. This happened after a drop in interest in such assets, the reason for this is the fall of bitcoin to the key level of $ 20,000 and below.
According to the well-known analytical platform Crypto India, their trading volume fell by 90-95% three months after the introduction of the comprehensive tax law.
It is noteworthy that platforms such as WazirX, CoinDCX and Zebpay have reduced trading volume by about 95% over the same period. Based on the current volume, the platform predicted that exchanges could receive income from trading commissions of a maximum of $1,000 to $3,000.
The latest example of the fall of Indian exchanges in the fight occurred with Vauld, supported by Coinbase. The four-year-old firm announced the suspension of withdrawals, trading and deposits on its platform on July 4, citing the financial difficulties of its key partners that affect its business.
According to the company, this move is aimed at exploring "the suitability of potential restructuring options" with its financial and legal advisors.
Before the sudden announcement, the exchange had already laid off 30% of its workforce to survive the crypto winter.