Recently, the Bharat Web3 Association (BWA), an India-based organization for the defense of crypto and Web3, has called for measures against offshore entities in the crypto world. The president of BWA, Dilip Chenoy, sent a letter to the Indian government requesting action. As a response, the Indian government decided to block the URLs of nine offshore exchanges. The exchanges have been notified and given two weeks to respond to the show cause notice. It is unclear whether the BWA initiative triggered the government’s action or if it was taken unilaterally.
Indian cryptocurrency exchanges are facing challenges as they struggle to survive under heavy taxes imposed by the government. This includes a 30% tax on cryptocurrency profits and a 1% transaction tax deducted at source (TDS). As a result, many Indian users have transferred their transactions abroad, leading to an estimated revenue loss of $420 million since July 2022.
The BWA has submitted a letter asking the government to require offshore exchanges to establish an Indian branch or entity and apply TDS deposit starting from July 1, 2022. They have also requested restrictions on access through mobile app stores and blocking IP addresses of non-compliant platforms.
The BWA emphasizes the need for equal conditions, particularly in relation to taxation and the 1% TDS. Indian exchanges are seeking a 30-day period for traders to withdraw their assets before any restrictions are implemented.
Overall, Indian cryptocurrency exchanges are taking steps to address issues such as taxation and ensure equal conditions. They believe that these actions will help protect users from potential frauds and promote the development of a secure virtual digital assets ecosystem.
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