Binance App Download Zooms In India After New TDS Became Effective

Binance App Download Zooms In India After New TDS Became Effective

The number of users on global cryptocurrency exchange Binance has zoomed after the government of India began levying taxes on cryptocurrency transactions. The daily trading volumes at major Indian cryptocurrency exchanges have plunged since the new tax rules came into effect on 1 July.

Record Number of Indian Users on Binance

The number of Indian user sign-ups zoomed on global cryptocurrency exchange Binance after a 1% tax deducted at source (TDS) became effective on July 1, Bloomberg reported on Tuesday.

The number of Binance app downloads in India spiked to 429,000 in August, the highest number this year, the publication said. In contrast, daily trading volumes at several Indian cryptocurrency exchanges were reportedly down since the 1% TDS became effective.

Commenting on the new tax, Rohan Misra, CEO at SEBA India, a subsidiary of Swiss-based SEBA Bank AG, said:

"The recent tax regulation is not explicitly clear on whether the 1% tax deducted at source extends to crypto derivatives transactions involving futures, as it does to crypto spot transactions."

The 1% TDS is levied on top of a new 30% tax on capital gains from crypto assets. Moreover, crypto trading losses cannot be offset against income. Indian crypto exchanges are also facing limited support from the banking system, making it difficult for users to move money in and out of trading platforms.

Another foreign cryptocurrency exchange, FTX, saw a rise in its app downloads since January. The exchange saw about 40,000 downloads in India in January, almost 96,000 in July, and 52,000 in August.

The Nasdaq-listed crypto exchange Coinbase Global Inc., however, saw its app downloads in India tumble to 16,000 in August from almost 31,000 in June. Coinbase tried to expand its operations in India in April but quickly ran into trouble with the UPI payment system.

While Binance’s app downloads zoomed, Indian cryptocurrency exchanges are looking at declining user sign-up numbers, the publication reports. Indian crypto exchange Coindcx’s app downloads fell to 163,000 in August from 2.2 million in January, according to the data from market intelligence firm Sensor Tower.

Another Indian crypto exchange, Wazirx, saw its monthly app downloads fall to 92,000 in August from about 596,000 in January. The exchange recently had a public dispute with Binance CEO Changpeng Zhao (CZ) over its ownership, prompting Zhao to encourage Wazirx users to transfer funds to Binance. Wazirx’s bank accounts were frozen by the Indian Enforcement Directorate (ED) in early August but were unfrozen earlier this week.

Regarding whether Binance has started collecting the transaction tax from users in India, a spokesperson for the exchange told the publication that the company "is currently monitoring the situation and will make further announcements in due course."