Binance Holdings Ltd’s billionaire CEO Changpeng Zhao is tightening his grip on India’s market for cryptocurrency trading in the aftermath of a major tax change.
Downloads of Binance’s app in India rose to 429,000 in August, the highest this year and nearly triple that of runner-up CoinDCX, data from market intelligence firm Sensor Tower shows.
Of the top exchanges, only Binance achieved higher downloads in India than in July.
The operator of the world’s largest crypto exchange stands in a market where rivals grapple with heavy taxes and the difficulty of moving money in and out of trading locations.
Daily volumes on major India-based platforms are down more than 90 percent since the 1 percent tax on crypto transactions was implemented in July.
While Mr. Zhao has outperformed competitors with low fees, various offerings and a popular peer-to-peer marketplace that allows easy movement between tokens and cash, another factor is foreign exchange and people of Indian origin. The opposite is true in the way it handles the transaction tax levied by the . on domestic residents.
Indian-origin platforms have started cutting levies, but several foreign peers such as Binance and FTX prompted investors to switch later, according to several users of the app, who looked at the matter related to the tax law. Asked to remain anonymous.
Traders may see a loophole in loose enforcement and a gray area as to whether the law applies to more complex transactions.
“The recent tax regulation is not explicitly clear whether the 1 percent tax deducted at source applies to crypto derivatives transactions involving futures, as is the case for crypto spot transactions,” it said. Rohan MishraChief Executive Officer of SEBA India, a subsidiary of Swiss-based SEBA Bank AG.
Binance is “currently monitoring the situation and will make further announcements,” a spokesperson said in response to questions about whether it has started collecting levies.
FTX declined to comment and India’s finance ministry did not respond to an email seeking comment.
Binance’s gains come amid a rare public dispute with its partner WazirX in India, prompting Mr. Zhao to encourage WazirX customers Shortcoming to Binance.
WazirX’s monthly downloads dropped to 92,000 in August, from about 596,000 in January.
The 1 percent levy, colloquially known as TDS, came on top of a new 30 percent tax on gains from the transfer of crypto assets, which is higher than in many other jurisdictions such as the US and UK.
The rules introduced this year also prevent crypto trading losses from being offset against earnings. In addition, limited backing from the banking system makes it difficult to fund accounts or switch from tokens to fiat currency.
The widespread adoption of the Binance app is in stark contrast to the downside for most other players. CoinDCX downloads, for example, dropped from 2.2 million in January to 163,000 in August, Sensor Tower data shows.
Billionaire Sam Bankman-Fried’s FTX garnered nearly 96,000 downloads in India in July and 52,000 in August, up from nearly 40,000 in January.
San Francisco-based Coinbase Global Inc. has said that it complies with crypto transactions tax regulations. Its downloads in India dropped to 16,000 in August, from about 31,000 in June.
– With assistance from Yuqi Yang.
(Except for the title, this story has not been edited by NDTV staff and is published from a syndicated feed.)