Four major Indian cryptocurrency exchanges – ZebPay, WazirX, Giottus, and CoinDCX – have seen their daily trading volumes plunge between 60% and 87% after a 1% tax deductible at source became effective on July 1.
The steep declines came from already lowered trading levels affected by a combination of plunging cryptoasset prices, unfavorable tax treatments, and difficulty getting cash onto trading platforms.
Binance-backed exchange WazirX, for example, traded $3.8 million on July 2, the day after the tax took effect. In early July of last year, it reportedly took the exchange less than two hours to reach that volume.
WazirX Vice President Rajagopal Menon noted that while long-term crypto holders are still buying and selling, market makers and high-frequency traders are “gone.”
The new tax regime was introduced by the Indian government back in February. It consists of the 1% that’s deductible at source, known as TDS, and a flat 30% tax on income from cryptocurrency investments. It also banned offsetting losses on digital assets.