Crypto exchange platform, Binance, saw an exponential rise in popularity in India this year, with 429,000 downloads from crypto traders in just the month of August. According to data from market intelligence firm Sensor Tower, this figure is the highest this year and almost three times that of runner-up CoinDCX.
This widespread popularity can be attributed to the fallout from a major tax change.
Binance stands out in a market where the rivals are dealing with steep taxes and the difficulty of moving money in and out of trading venues.
Zhao’s Binance offers lower fees, varied offerings and a popular peer-to-peer marketplace that allows easier movement between tokens and cash as compared to Indian exchanges.
Another necessary factor is the way foreign exchanges and Indian exchanges deal with the transaction tax imposed on domestic residents.
While Indian exchanges have begun deducting the 1% levy on transactions, many foregin exchanges such as Binance and FTX have not yet. This is what has prompted investors to shift to foregin exchanges, said several users of the apps who asked to remain anonymous given the matter relates to tax law.
When asked whether the platform has started levying the taxes, a spokesperson for Binance said that the platform is “is currently monitoring the situation and will make further announcements in due course.”
SBF’s FTX declined to comment on this situation.
Binance’s recent public spat with WazirX, its Indian partner, has led Zhao to encourage WazirX customers to deflect to Binance. WazirX’s monthly downloads fell to 92,000 in August from about 596,000 in January.
Read Also: Binance to Cease Off-chain Transfers with India-based WazirX
Even CoinDCX downloads fell to 163,000 in August from 2.2 million in January.
San Francisco-based Coinbase has said it complies with the crypto transaction tax rules, resulting in its downloads falling to 16,000 in August from almost 31,000 in June.
On the other hand, Sam Bankman-Fried’s FTX saw almost 96,000 downloads in India in July and 52,000 in August from about 40,000 in January.
The Indian government passed a law this year imposing a 30% tax on gains from the transfer of crypto assets in addition to a 1% TDS levied at the source.
