Regressive tax measures and an uncertain policy on virtual assets are prompting Indian crypto trading platforms to relocate.
The Indian Express reports that WazirX co-founders Nischal Shetty and Siddharth Menon have relocated to Dubai with their families. Firms like ZebPay and Vauld have relocated to Singapore, while CoinDCX has established a Singapore branch.
With the recent global crypto slump and strict Indian regulations, the industry that peaked in November 2021 is in trouble. Payment, deposit, and withdrawal activities on several crypto trading platforms have been suspended.
“We are in a bear market right now…many people who are building crypto and Web 3.0 products are moving to jurisdictions with more policy clarity,” the Indian Express cited an unnamed top executive of one such exchange.
India’s crypto exchanges relocate to friendlier nations. Image: Thecryptocurrencypost
Why Dubai and Singapore?
Indian cryptocurrency usage was second in August 2021, according to Chainalysis, a blockchain analytics provider. That, however, was insufficient.
Crypto-asset transactions and non-fungible tokens (NFTs) transfers are taxed at a rate of up to 30% in the nation. For incomes above 10,000 rupees ($127), a 1% tax is deducted. Crypto and digital asset gifts are subject to taxation as well.
The city of Dubai does not impose any taxes of any kind. Revenues from digital assets are taxed only by a 5% Value-added Tax (VAT). Because of these factors, the city has become a magnet for crypto investments.
On the other hand, Singapore does not impose any tax on cryptocurrency purchases. However, the transaction’s purpose will determine tax treatment.