Crypto Chaos: How Indian Exchanges Are Fighting to Survive Amid Tough Regulations
Indian cryptocurrency exchanges are employing various strategies such as cost-cutting, contract renegotiation, and business model diversification to survive stringent regulations and taxes imposed by the government.
Indian cryptocurrency exchanges are struggling to stay afloat amid tough regulations. Key players like CoinDCX, CoinSwitch, WazirX, BuyUCoin, ZebPay, and Giottus are reducing expenses, renegotiating contracts, and diversifying business models in hopes of surviving. Their financial runways, according to insiders, range from 21 months to four years.
The challenges began on Feb. 1, 2022, when India enforced a 30% tax on crypto profits and a 1% tax deducted at source (TDS) on transactions. The regulations sparked a "brain drain" in the industry, leading to a significant drop in trading volumes and increased scrutiny from enforcement agencies. Despite this, some exchanges remain optimistic, banking on future bull markets and the nation's regulatory alignment with the Financial Action Task Force (FATF).
CoinDCX is relying on its recent $135 million series D funding and is betting on its Okto Wallet. WazirX, despite facing a turbulent year, plans to renegotiate contracts and focus on cost reductions. CoinSwitch has shifted from a crypto exchange to an investment platform, while ZebPay is backed by a Singapore subsidiary and plans to increase user growth and institutional investment. BuyUCoin, after laying off 10% of its staff, is focusing on global expansion with operations in Estonia and Singapore. Giottus, a smaller exchange, plans to increase operational efficiency, cut marketing costs, and reduce risks.
Despite challenges, Indian crypto exchanges are demonstrating resilience and adapting their strategies, showing that they're ready to withstand the storm.
