The Indian crypto trade volume drops when new tax regulations come into force

The Indian crypto trade volume drops when new tax regulations come into force

The trade volume of Indian crypto exchanges collapsed after a controversial tax policy had entered into force on Friday.

Top exchanges including wazirx , zebpay , Coindcx and Bitbns According to Coingecko, the volumes fell between 10 % and up to 70 % last week.

Coindcx experienced the biggest dive, with a volume decline of around $ 6 million on June 28 to just under $ 2 million on Tuesday-a decrease of 70 %. Wazirx's trading volume went back to a similar level, while Bitbns and Zebpay recorded relatively lower declines.

The decline in volume cannot be fully attributed to the entry into force of the Indian crypto tax laws. A combination of falling crypto-asset prices, liquidations and financial struggles of important crypto actors, increasing inflation and expecting a recession have all led to the current "crypto winter".

Nevertheless, crypto managers in India had warned that the decision of the central authority to raise a source tax of 1 % (TDS) over a flat tax from 30 % to crypto profits, would prevent investors from trading digital assets.

nishal Shetty, CEO by Wazirx, continued Twitter Crypto exchanges should flow to avoid local tax laws. "Some have spread misinformation that trading in foreign exchange TDS. That is wrong," he said.

According to Khaleelulla Baig, co -founder of the Koinbasket based in Singapore, investors should also not expect that the TDS will be changed by 1 % this year.

"It is important that the government will soon consider revising the guidelines for promoting entrepreneurship in the web3 area," he said in an email.

Before the 1%TTDs came into force, said Ashish Singhal, CEO of Coinswitch that block works cryptocurrencies should be taxed at eye level with the stock markets.

"The crypto market is driven by high frequency dealers, such as intraday dealers on the stock markets. These retailers work with extremely low margins, and the binding of their capital with high TDS will restrict their ability to act," he said.

falling trade volumes could affect the sources of income from these companies and may cause them to relieve employees in an industry that has already been struggling with high employee fluctuation.

"The transaction volume in the crypto room has broken in," Manuel Ortiz-Olave, co-founder of the equity token company Brickken, told Blockworks by Telegram. "This means that companies that depend on transaction fees (i.e. stock exchanges and the like) will experience a comprehensive revision of their sales forecasts, which will lead to decisions to reduce costs."

companies that build on blockchain technology and offer services that are not necessarily associated with the performance of cryptocurrencies will be better off in comparison, he added.

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The post "Indian crypto trade volume sinks when new tax rules come into force" is not financial advice.