India’s Leading Crypto Exchange CoinDCX Sees 2000% Increase in Deposits Amid Crackdown on Offshore Exchanges
India’s top cryptocurrency exchange, CoinDCX, has reported a significant surge in customer deposits following the Indian finance ministry’s show cause notice to nine major offshore exchanges, including Binance. These offshore exchanges, which include Kucoin, Huobi, Kraken, and others, were served with notices for non-compliance with local money laundering laws.
CoinDCX shared a press release stating that they have experienced a 2000% increase in deposits since December 28. The exchange’s co-founder and CEO, Sumit Gupta, reaffirmed their commitment to providing a secure and compliant investment environment for users. Additionally, CoinDCX is offering incentives for users looking to migrate their assets to their platform.
1% TDS Impact on Trading Volumes
Since the implementation of the 1% tax deducted at source (TDS) on crypto exchanges in India in July 2022, domestic trading volumes have plummeted by approximately 90%. Many Indian users shifted to offshore platforms during this period. However, not all foreign exchanges complied with the TDS rule.
The recent show cause notice sent to offshore exchanges requires them to implement the TDS or face a ban from operating in India. Foreign exchanges have until January 11th to respond or risk a complete ban. Earlier, CoinDCX’s co-founder referred to the 1% TDS as a death blow to the industry.
Advocacy Body Calls for Action Against Offshore Entities
The crackdown on offshore exchanges was prompted by a formal request from the Bharat Web3 Association (BWA), an advocacy body representing the Indian crypto and Web3 community. CoinDCX and other local exchanges are members of the BWA, which urged action against these offshore entities.
Hot Take: CoinDCX Attracts Investors Amid Regulatory Pressure
Despite the regulatory pressure on offshore exchanges, CoinDCX’s 2000% increase in deposits showcases the growing interest in cryptocurrencies among Indian investors. The crackdown on non-compliant exchanges has driven users to seek secure and compliant alternatives like CoinDCX. This surge in deposits demonstrates the resilience and appeal of regulated crypto platforms in India’s evolving market. As the industry faces regulatory challenges, exchanges that prioritize user security and compliance will likely continue to attract investors seeking a trustworthy crypto trading experience.
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