LONDON (Bywire News) - Crypto exchanges in India are suffering with a new crypto tax hitting confidence in the sector. Along with the broader concerns about the industry, trading volumes are down 90% with investors looking increasingly concerned about the prospects for the future.
From the start of this month, India imposed a 1% tax on crypto trades. Investors have started to avoid the Indian market which is increasingly being seen as hostile to the crypto sector.
"We are scraping the bottom of the barrel as far as volumes are concerned,” said Rajopal Menon Vice president of the WazirX crypto exchange. "The amount of regulatory tangles, lack of ease of doing business and paperwork that has been created on every single trade has made investors and traders wary and we are seeing that people are moving to international exchanges or to the grey market."
Bitcoin had its worst quarter on record with prices down 56% and the prospects for recovery looking slim. With trading volumes on the slide, Indian exchanges have cut down on recruitment and marketing as they batten down the hatches in preparation for the projected downturn.
Founder of digital bank Cashaa, Kumar Gaurav said "Several companies are laying off people after hiring a huge number last year and now have to look at operational and other corporate cost-cutting measures."
Others view this as a period of market consolidation with weaker businesses falling by the wayside as CoinSwitch CEO Ashish Singhal explained.
"A bear market is a cleansing process and weak businesses will perish while companies with the right business model will emerge stronger," he said.
(Writing by Samba Jallow, editing by Tom Cropper and Klaudia Fior)