Tag: crypto india

CoinDCX Hatches a Million Dollar Plan to Reap Advantages of India’s Crackdown on Foreign Exchanges

Indian crypto exchanges are reaping the benefits of the government opening compliance investigations on foreign crypto exchanges like Binance and Kraken. Over the last week, Indian crypto exchanges recorded a massive inflow of deposits, that has now opened a competition amongst Indian exchanges. CoinDCX, that claims to have seen a 2,000 percent hike in crypto desposits in the last few days, has hatched a plan to lure-in more investors to transfer their crypto investments from foreign exchanges onto its platform.

In a legit million-dollar plan, CoinDCX has decided to offer one percent bonus to all investors who make deposits on the exchange between January 9 and January 18, 2024. In an announcement shared on Tuesday, the exchange said it has earmarked a fund pool of $1 million (roughly Rs. 7 crore) to reward investors looking to migrate their crypto from non-compliant offshore exchanges to those that are registered with India’s Financial Intelligence Unit (FIU).

India is accelerating efforts to deploy legal requirements to regulate the crypto sector. After levying taxes on crypto incomes last year, India has brought the digital assets service providers into the ambit of the Anti-Money Laundering and Counter-Financing of Terrorism (AML-CFT) framework under the provisions of the Prevention of Money Laundering Act (PML) Act in March 2023 as well.

As part of its ongoing efforts, India has ordered multiple foreign exchanges to show the status of their compliance with India’s Web3 sector laws. The nine offshore Virtual Digital Assets Service Providers are Binance, Kucoin, Huobi, Kraken, Gate.io, Bittrex, Bitstamp, MEXC Global and Bitfinex.

“As part of compliance action against the offshore entities, Financial Intelligence Unit India (FIU IND) has issued compliance Show Cause Notices to the following nine offshore Virtual Digital Assets Service Providers (VDA SPs) under Section 13 of the Prevention of Money Laundering Act, 2002 (PMLA),” the Ministry of Finance had disclosed in an official announcement last week.

CoinDCX, as part of its plan, will present one percent worth of Tether tokens on the total amount of deposit to the users.

“Example: If a user deposited 10 USDT worth of BTC on January 8 and 20 USDT worth of CELO on 17th Jan, you will receive 30*1 percent = 3 USDT worth of INR on the Payout Date, i.e., Feb 16, 2024- Maximum bonus is capped at Rs. 10,000 per user,” the official statement noted.

The exchange has also confirmed that its operations are registered with India’s FIU and have further vouched to comply with India’s crypto rules.

Cryptocurrency is an unregulated digital currency, not a legal tender and subject to market risks. The information provided in the article is not intended to be and does not constitute financial advice, trading advice or any other advice or recommendation of any sort offered or endorsed by NDTV. NDTV shall not be responsible for any loss arising from any investment based on any perceived recommendation, forecast or any other information contained in the article. 

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India’s WazirX Sees 90 Percent Dip in Crypto Trading Volume Amid Regulatory Delays

WazirX disclosed the trajectory of its business this year only to give an insight into the slump spell that the crypto market is under as India awaits to complete regulatory deployments to oversee the sector. The Indian crypto trading platform, in 2023, managed to generate around $1 billion (roughly Rs. 8,315 crore) in terms of trading volume. This is a sharp 90 percent decline from its previous year’s trading volume of $10 billion (roughly Rs. 83,151 crore) and 2021’s figure of $43 billion (roughly Rs. 3,57,534 crore).

In terms of addressing the potential reasons why trading volumes may have sunk this year, WazirX decided to keep its lips sealed. Interestingly, its competitor CoinDCX crypto exchange fired 12 percent of its workforce earlier this year, clearly pinning the blame for pushing investors away on India’s tax regime.

The exchange, did however, give other insights that it observed in-terms of trading patterns in India for the year of 2023. Bitcoin (BTC), Shiba Inu (SHIB), Ripple (XRP), Ethereum (ETH), and Polygon (MATIC) emerged as the most traded cryptocurrencies among members of the Indian crypto community on WazirX.

Women constituted 22 percent of the total trading volume on the platform, and women aged between 21-40 years made up 83 percent of the total volume traded by all women users. In the case of men, the age bracket of 21-40 years constituted 76 percent of all men users on the platform.

Uttar Pradesh, Maharashtra, Tamil Nadu, Gujarat and Haryana house the bigger shares of traders, whereas the states with the highest trading volumes are Tamil Nadu, Uttar Pradesh, Maharashtra, West Bengal, and Haryana.

The Vice President of the trading platform, Rajagopal Menon, has projected a bright future for blockchain-related sectors in the days to come.

“With the advent of maturing blockchain technologies, cryptocurrencies are set to evolve beyond speculative assets, becoming integrated within supply chain management, healthcare, and digital identity verification. Asset tokenisation is positioned to become a prominent trend. User experiences across Web3 technologies will witness a revolution in 2024, and the Bitcoin halving signals a bull market in coming times,” Menon said, in a rather optimistic forecast for the crypto sector.

Along with CoinDCX, CoinSwitch recently accepted that crypto trading volumes and user queries have indeed taken a hit in India, which have had clear impact on the business.

As far as India’s crypto laws are concerned, it could take another eighteen months leading up to mid-2025 for all crypto regulations to see light of the day in the nation. India is accessing all possible impacts of involving crypto with its existing financial systems.

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India’s 1 Percent TDS on Crypto Transactions Needs to be Slashed to 0.01 Percent: Study

India, that has levied a one percent TDS on each crypto transaction, is again facing suggestions regarding a change in the law. In its latest study, Delhi-based think tank Esya Centre has advised the government to slash its 1 percent TDS on crypto transactions to 0.01 percent. In doing so, India could garner more revenue from the Web3 sector than what it’s managing to churn at present. It is reportedly estimated that India may have lost $420 million (roughly Rs. 3,503 crore) since having imposed this tax law on crypto activities in July last year.

In India, crypto gains are taxed at 30 percent and each crypto transaction sees a one percent tax deducted at source (TDS). At the time, the Indian finance ministry had said that levying taxes on crypto activities would keep the otherwise largely anonymous crypto transactions, somewhat traceable.

Soon after these laws were deployed last July, the average daily transaction volume on Indian exchanges WazirX, CoinDCX, BitBNS, and Zebpay had reportedly dipped to $5.6 million (roughly Rs. 44 crore). Up until June last year, this volume was around $10 million (roughly Rs. 80 crore).

In its report, Esya said the drop in crypto engagement in India has continued for over a year now, which is hindering the growth of the sector.

“The one percent TDS levy seems intended to discourage speculative activity and increase traceability in the virtual digital asset (VDA) ecosystem. Our empirical analysis suggests these goals remain unmet,” said the report titled ‘Impact Assessment of Tax Deducted at Source on the Indian Virtual Digital Asset Market’.

Despite numerous appeals to the government regarding the reconsideration of this tax law, no changes have been introduced in the past year. The Bharat Web3 Association (BWA), that is comprised of Indian crypto and Web3 players, also criticised the TDS law but saw no initiative from the government towards change.

By August 2022, India had failed to score a spot on the index of the world’s most crypto-ready nations.

The slowdown in India’s crypto ecosystem growth has left exchanges high and dry. In August this year, CoinDCX laid off twelve percent of its workforce owing to the impact of TDS on domestic exchanges. Reports about Indian crypto traders flocking to international exchanges also made it to the headlines these past months.

“The one percent TDS has led Indian users to trade on offshore VDA exchange platforms and other untraceable channels. This, in turn, results in lost revenue for the exchequer and lost opportunities in the form of foregone positive externalities for the digital economy in India,” the Esya report has noted.

Previously, a report by Chase India and Indus Law had also advised the government of India to slash the TDS law on crypto transactions.

As of now, the government has not reacted to these suggestions and urges from the crypto community. Meanwhile, it is estimated that only 0.07 percent of Indian crypto owners actually declared and paid their taxes in the year of 2022 while over 99 percent of the community members evaded filing their crypto taxes. The finding was published by Divly, a Sweden-based tech research firm in April this year.

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Bengaluru’s Crypto-Friendly Tea Seller Admits to Seeing No Profits on Earnings

Bengaluru, the Silicon Valley of India, is a safe haven for techies and entrepreneurs looking to make it big in their respective industries. One of the biggest hosts to crypto-related firms and projects in India, Bengaluru now has a tea seller, who has begun selling ‘chai’ in return for crypto payments. Shubham Saini, a 20-something in Bengaluru has recently made headlines for his unique crypto-friendly tea stall in Bengaluru’s Marathahalli area. In conversation with Gadgets 360, Saini admitted that at this point, he is not seeing any profits on his crypto earnings.

Indians have to pay a 30 percent tax on all crypto earnings and profits. Back in July, Indian crypto exchanges recorded a nosedive in trading volumes after the one percent TDS rule on each transaction went live on July 1. The average daily transaction volume on Indian exchanges WazirX, CoinDCX, BitBNS, and Zebpay had dipped to $5.6 million (roughly Rs. 44 crore) at the time. Up until June, this volume was around $10 million (roughly Rs. 80 crore).

Well, Saini is not looking at reap-in real-time benefits by holding crypto assets.

“If I convert this transacted crypto into Indian Rupee now, I am not seeing any profits. But I believe in the certain future and that’s why I hold these crypto assets in my wallet considering a long term, more gain purpose,” the young entrepreneur told Gadgets 360.

Priced Rs. 20, the stall-owner also accepts payments in dollars. Pictures of his tea stall, that have emerged on Twitter, show boards placed on the stall showing Dollar to Rs. conversions to make calculations easier for crypto payers.

“I am getting three to four crypto payments everyday. I am using multiple exchanges depending on whatever the customer is comfortable paying with,” Saini told Gadgets 360.

Saini dropped out of his BCA semister and dived right into crypto trading around 2020 when his investment portfolio of Rs. 1.5 lakh jumped by a 1000 percent and swelled to 30 lakh. In a market crash that followed however, Saini’s portfolio crashed majorly and left him with just around Rs. 1 lakh.

That’s when he decided to open this tea stall named ‘Frustrated Dropout’ in Bengaluru. In order to be linked with the crypto world, Saini opened payments for refreshments from his stall via cryptocurrencies.

The stall that offers free tea to personnel from India’s defense forces, is looking to expand into the world’s most green café chain.

“Our vision is to become the world’s largest green company as well as cafe chain, which will use only product made from our soil, through which we can also save our environment and give employment to more and more people,” says the official website of Frustrated Dropout.

Meanwhile, despite numerous appeals from members of India’s crypto community, the country’s finance ministry did not amend the tax laws that were enforced on the virtual digital assets (VDA) sector this year.

The government is also not looking to incentivise workers in the sector, a subject that drew strident criticism in the country around March.

In recent market surveys, India has failed to grab a spot among world’s most crypto-friendly nations. Hong Kong topped the list.

Finance Minister Nirmala Sitharaman has recently called for global cooperation in regulating the crypto sector.

Over seven per cent of Indians owned digital currency in the form of cryptocurrency in 2021, according to the United Nations trade and development body UNCTAD, which said the use of cryptocurrencies globally, including in developing countries, has increased exponentially during the COVID-19 pandemic. India found itself at the seventh spot.

Cryptocurrency is an unregulated digital currency, not a legal tender and subject to market risks. The information provided in the article is not intended to be and does not constitute financial advice, trading advice or any other advice or recommendation of any sort offered or endorsed by NDTV. NDTV shall not be responsible for any loss arising from any investment based on any perceived recommendation, forecast or any other information contained in the article. 

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