Crypto exchange Binance rules out India expansion citing taxation issues
At a Techcrunch Crypto conference on Thursday, CZ admitted that his crypto exchange is unlikely to expand its operations in India.
Mon, 21 Nov 2022, 06:31 am UTC
Crypto exchange Binance does not see India as a viable location for its business. This was revealed by CEO Changpeng Zhao (CZ) who cited the country’s strict tax regime, adding that his company prefers countries where regulations are pro-crypto and pro-business.”
At a Techcrunch Crypto conference on Thursday, CZ admitted that his crypto exchange is unlikely to expand its operations in India. “To be honest, I don’t think India is a very crypto-friendly environment,” the Binance CEO said, Bitcoin.com reported.
CZ expressed his disappointment over the country’s crypto tax regime, which was implemented this year. On top of the 30 percent tax on crypto income, the taxation scheme also imposes a 1 percent deduction at the source (TDS) for crypto transactions. “If you are going to tax 1% on each transaction, there is not going to be that many transactions,” he commented on India’s aggressive taxation.
Such a taxation scheme would mean lesser trading volumes for crypto exchanges operating in the country. “A user could trade 50 times a day and they will lose like 70% of their money. There is not going to be any volume for an order book type of exchange. So we don’t see a viable business in India today,” the Binance CEO explained.
Zhao revealed that his firm is in talks with various industry groups and influential individuals on how to address the tax issue. However, he does not expect the taxation regime to be changed anytime soon.
“We just have to wait. We are in conversation with a number of industry associations and influential people and trying to put some logic there,” he added. “We are trying to get this message across, but tax policies typically take a long time to change.”
The executive explained that his company would prefer to operate in locations more friendly to crypto-businesses. “Binance goes to countries where regulations are pro-crypto and pro-business. We don’t go to countries where we won’t have a sustainable business — or any business, regardless of whether or not we go,” CZ explained.
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