The volume of cryptocurrencies has fallen drastically, especially for the Indian market, due to the tax levied on crypto transactions and the recent raids by the Enforcement Directorate (ED) on crypto exchanges like WazirX, CoinDCX, etc.

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Some of the major cryptocurrencies like Bitcoin and Ethereum plunged by more than 60 per cent. Cryptocurrencies like Solana and Shiba Inu fell by more than 90 per cent in 2022. Even the crypto exchanges in India, like Wazir X have witnessed a massive fall in terms of volume, as it has dopped by more than 75 per cent.

Only Dogecoin seems to have bucked this trend.

The volume of Dogecoin surged immensely immediately after Elon Musk took over Twitter. Within a few days after Musk owned Twitter, the volume of Dogecoin rose by 1300 per cent in October.

In the 2022 Budget announced on February 1 this year, the Finance Minister introduced Section 115BBH, which levied a 30 per cent tax (plus applicable surcharge and 4% cess) on profits made by trading cryptocurrencies on or after April 1, 2022. This rate is the same as India's highest Income Tax bracket. From July 2022, a TDS (tax deducted at source) of 1 per cent was also incorporated on crypto transactions.

The situation for the crypto market in India further worsened as ED raided ten cryptocurrency exchanges. The crypto exchanges were accused of allegedly laundering more than Rs 1,000 crore and ED identified their activities as proceeds of crime of the accused firms under investigation in the instant loan app case — most of them having links in China. ED also froze the accounts of a majority of these crypto exchanges.

In March, 2022, the government had said that it detected GST evasion to the tune of Rs 95.86 crore across 11 crypto exchanges, including WazirX, CoinDCX, and CoinSwitch Kuber.