Indian crypto exchanges hit hard by regulators, trading volume plummets by 90%!
During this crypto winter, worldwide crypto traders have suffered significant losses. The situation is bleak, as the worldwide market value of digital currencies has fallen below $ 1 trillion, which is massively low from the peak of $ 3 trillion in November 2021.
Although several global problems have slowed market development in 2022, a few are primarily regional.
Take India, for example.
After India’s Ministry of Finance first announced cryptocurrency taxes, the warning bells went off. The government was still sharp from the beef market in November 2021, and planned to apply high tax rates on virtual currencies.
Crypt exchange volume falls by 95%
Crypto India had published a Twitter post discussing the trading volume of the cryptocurrency exchange. The post represents a fall of 90-95% in 3 months since the new cryptocurrencies came into force.
According to the data above, it is clear that taxes have significantly affected crypto-exchange activities in India from 1 April.
An identical decline in trading was observed on Indian stock exchanges when a 30% tax on profitable crypto trades was imposed on April 1, 2022. Over the course of four days, trading volume fell by 44%.
Another thread from Crypto India depicts the drop in the trading volume of the top exchange.
According to the tweet, WazirX’s volumes have fallen by 98%, ZebPay has fallen by 94%, and CoinDCX’s volumes have fallen by 93%. Surprisingly, Bitbns traffic has fallen by only 17%. Even then, all these were unpleasant statistics, given that the crypto business in India is usually flourishing.
The Reserve Bank of India (RBI) has increased its TDS on virtual currencies by 1%. Pursuant to section 194S of the Income Tax Act, the tax is imposed on transactions exceeding Rs 10,000 per year (in accordance with the Finance Act, 2022).
What does the Indian crypto community have to say?
“The TDS tax is a modern example of a tax provision that would be very detrimental to the crypto industry. The tax provision will not only discourage innovators who have done a good job of promoting India as an innovative hub for the industry, but also the government will be at a loss. as they will lose the opportunity to earn massive tax revenues due to the general reduced transaction volume, said Amanjot Malhotra, country manager in Bitay, to Business line.
However, a few experts believe it is too early to determine the full effect of the new TDS rules as trading volumes generally fall over the weekend.
“At present, it is still too early to predict the consequences of TDS. We will be in a better position to understand this by the second week of July,” Rajagopal Menon, Vice President of WazirX, told The Economic Times
On the other hand, few founders believe the TDS rule is positive for cryptocurrencies.
“Investors can now trade with confidence by paying current taxes, and crypto-entrepreneurs in India can run their business without fear,” Shivam Thakral, CEO of the BuyUcoin cryptocurrency exchange, told the company. Hindu BusinessLine.
Vauld to stop withdrawal
However, this is not just about India, but represents the global change of attitude towards crypto.
The cryptocurrency exchange platform Vauld announced an immediate suspension of all withdrawals, trades and deposits on the platform. The Singapore-based company went on to say that it discussed transformation opportunities with its financial and legal consultants.
The Vauld management made this decision due to financial concerns in the crypto market in several aspects. However, this is believed to be a safeguard measure rather than a lack of cash.
Loss of trust in Crypto Exchange
Conversely, there is a growing chorus when it comes to holding digital currencies on stock exchanges.
For example, on Twitter, a Bitcoin trader named Nebraskangooner stated it “Keeping money on the stock exchanges meant losing everything”, while another said, “It means disrespect for money.”
