WazirX volume falls off a cliff amid India’s crypto scrutiny

The trading volume at top Indian crypto exchange WazirX fell to $1 billion in 2023 as the platform faced intensifying regulatory pressure in its home market alongside a broader slump for digital asset prices — and equities — globally.

The total volume of cryptocurrencies traded on WazirX’s platform this year was down 90% compared to 2022, when volumes hit $10 billion and 97% lower than 2021’s $43 billion.

WazirX, which has had a dispute with Binance over the Indian firm’s ownership, put a positive gloss on the latest figures, touting the $1 billion trading tally in a public statement Tuesday. But the exchange declined to contextualize the figure by skipping the far higher levels seen when the crypto fever was at its peak in 2021 or even in 2022 before the steep sell-off took hold.

The 97% plunge in trading volume comes as WazirX faces mounting regulatory pressure from Indian authorities that have left the country’s once-burgeoning crypto sector fighting for survival. India began taxing virtual currencies last year, levying a 30% tax on the gains and a 1% deduction on each crypto transaction. Indian lawmakers have consistently praised Prime Minister Narendra Modi’s leadership for protecting the Indian citizens from the frauds engulfing the crypto market and dramatic fall in asset prices.

New Delhi-based think tank Esya reported early this year that the local taxation rule had forced many Indian traders to use foreign platforms including Binance and Coinbase. Coinbase later stopped onboarding new customers in India.

India’s intensifying regulatory crackdown on cryptocurrencies has cast a chill over local investors once eager to back the country’s crypto startups. The unfavorable climate, previously cited by Binance as grounds for its own caution over Indian expansion, has made venture capital firms dramatically wary of exposure to the embattled sector, said people familiar with the matter.

Many of the top India-focused VCs who had enthusiastically backed crypto companies just last year have since pivoted decisively into other industries, according to people familiar with the matter.

India central bank chief warns crypto will cause the next financial crisis if permitted to grow