Indian Crypto Traders Move to Binance and FTX, Here’s Why!
Changpeng Zhao, Binance’s crypto platform CEO, is serious about securing his position in the Indian crypto trading market due to a change in the tax structure in India.
Binance currently has an edge over its competitors in the Indian market because it does not include high taxes or difficulties in moving money in and out of its trading platforms.
The number of downloads of the Binance app in India has increased to 429,000 in the month of August.
It has been the highest this year and is nearly triple that of second-ranked CoinDCX, according to data from market intelligence firm Sensor Tower.
Additionally, Binance remains the only top exchange to achieve higher downloads in India compared to the month of July.
This also indicates that Binance has witnessed a significant high growth in popularity in India this year. This gain in popularity can be attributed to the major tax overhaul that India witnessed this year.
Binance happens to offer lower fees along with other offerings and a popular peer-to-peer marketplace that allows seamless movement between tokens and cash compared to the Indian exchanges.
Indian platforms lose due to deduction of fee
Indian crypto exchanges belonging to India have started deducting the fee, but foreign platforms like Binance and FTX have not started doing so.
This has simply caused investors to switch to foreign platforms such as Binance and FTX, as mentioned by users of the apps, with reasons that were solely related to tax matters.
Many traders can find a loophole in tax enforcement and a gray area where the law applies to more complex transactions.
Binance happens to be the world’s largest crypto exchange, and it chooses a different path compared to its rivals, who are dealing with increased taxes and difficulty moving money in and out of trading venues.
Daily trading volume on India-based crypto platforms is down by 90% since 1% tax on crypto transactions took place in the month of July this year.
Binance has arguably outmaneuvered Indian competitors with low fees and a better peer-to-peer marketplace.
The other very important factor has to be the difference in how foreign exchanges handle transaction taxes levied on domestic residents as compared to Indian exchanges.
There is still less clarity about crypto tax in India
The latest tax regulations in India are still unclear and also ambiguous regarding many aspects.
Rohan Misra, Managing Director of SEBA India mentioned,
The recent tax regulation is not explicitly clear on whether the 1% withholding tax extends to crypto derivative transactions involving futures, as it does to crypto spot transactions.
According to Binance, “it is currently monitoring the situation and will make further announcements in due course,” said a spokesperson, who said this is in response to questions related to the collection of the fee.
