Binance CEO Changpeng Zhao is expanding his dominance over the Indian crypto trading industry. Since the Indian government began taxing cryptocurrency transactions, the number of Indian users on the foreign cryptocurrency exchange Binance has skyrocketed. According to data from market intelligence company Sensor Tower, downloads of Binance’s app in India increased to 429,000 in August, the biggest number this year and nearly triple that of second-place CoinDCX. Among the leading exchanges, only Binance saw more downloads in India than in July.
In a market where competitors are struggling due to high taxes and the difficulties of getting money into and out of trading venues, the owner of the biggest cryptocurrency exchange in the world stands apart. Since a 1% tax on cryptocurrency transactions went into force in July, daily crypto trading volumes at India-based crypto exchanges have decreased by more than 90%.
Binance CEO CZ has opposed the force with low fees, diverse offerings, and a popular peer-to-peer marketplace that facilitates the exchange of tokens and cash. Another factor which differentiates Binance compared to other exchanges is how foreign exchanges and those with Indian roots handle the transaction tax imposed on domestic residents.
Foreign Exchange vs Indian Exchange: Where Indian crypto traders will go?
According to multiple users of the applications who asked to remain anonymous because the problem involves tax legislation, Indian-origin platforms have begun deducting the duty, but many overseas peers, including Binance and FTX, have not, pushing investors to transfer to the latter. Traders may notice a gap in enforcement and a grey area over whether the legislation applies to more complicated transactions.
Binance’s gains coincide with a rare public fight with WazirX, its Indian partner, which prompted Zhao to push WazirX users to switch to Binance. Monthly downloads for WazirX fell to 92,000 in August, down from over 596,000 in January. The 1% TDS came on top of a new 30% tax on gains from the transfer of crypto assets, which is harsher than in many other jurisdictions such as the US and the UK.
This year’s rules also prohibit crypto trading losses from being deducted against income. Furthermore, the banking system’s limited support makes it difficult to fund accounts or convert tokens to fiat currency. The increased popularity of the Binance app contrasts with reductions for the majority of other participants. Sensor Tower data shows that CoinDCX downloads fell to 163,000 in August from 2.2 million in January. FTX received around 96,000 downloads in July and 52,000 in August, up from around 40,000 in January.
Coinbase Global Inc., based in San Francisco, has stated that it conforms with the crypto transaction tax requirements. Downloads in India fell to 16,000 in August, down from around 31,000 in June.
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