Indian cryptocurrency exchanges are facing hurdles as trading volumes plunge significantly over controversial tax law that requires crypto investors to pay 1% of tax deducted at source (TDS) if a transaction exceeds ~$130.
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As per a report from Bloomberg, trading volume on ZebPay, WazirX and CoinDCX plunged between 60% and 87% shortly after the 1% tax came became effective on July 1. The report notes that WazirX generated $3.8 million worth of trading on July 2, while it would have taken less than two hours to make the same numbers in July last year.
WazirX Vice President, Rajagopal Menon, noted that even though long-term investors are still trading, market makers and high-frequency traders are “gone.” In addition to TDS, the Indian government also a flat 30% tax on income from crypto investments.
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