India’s Crypto Regulation Backfires: WazirX Sees 97% Trading Volume Drop

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WazirX, India's leading cryptocurrency exchange, has witnessed a staggering 97% decline in trading volume compared to 2021, as regulatory pressure and a broader global slump in digital asset prices took their toll.

India’s controversial crypto-related tax laws have hampered the country’s digital asset industry. Last year, India implemented a tax on virtual currencies, imposing a 30% tax on gains and a 1% deduction on each crypto transaction.

Lawmakers in India have applauded Prime Minister Narendra Modi’s efforts to protect Indian citizens from fraudulent activities in the crypto market and the subsequent drastic price fluctuations. However, a report by Esya Centre, a Delhi-based technology policy think tank, earlier this year showed that the regulatory efforts have backfired.

Per the report, Indian crypto investors have moved over $3.852 billion (INR 32,000 crore) worth of digital assets from local to international crypto exchanges since February last year, when the nation announced a 30% tax on income from cryptocurrencies.

“Of this, cumulative volume of $3,055 million was offshored within six months of the current financial year,” the report said, adding that “an estimated 17 lakh users switched” from domestic crypto exchanges to foreign counterparts.

India’s 1% TDS Law Killed Liquidity on Exchanges

The Esya Centre report noted that the 1% levy has hurt crypto liquidity in India as it forces high-frequency traders to dramatically reduce their trading in a bid to trim taxes. The report said that domestic exchanges lost 81% of their trading volumes in four months after the imposition of the much-debated 1% TDS rule.

“We anticipate a commensurately large negative impact on tax revenues, as well as a decrease in transaction traceability – which defeats the two central goals of the extant policy architecture,” the report added.


“The current tax architecture may lead to a loss of approximately $1.2 trillion of local exchange trade volume in the next four years.”

The think tank suggested that Indian officials change the TDS from 1% per transaction to 0.1%, making it at par with the securities transaction tax. They also recommended progressive taxes on gains instead of the flat 30% tax.

WazirX’s Trading Volume Drop by 97% Compared to 2021

WazirX, India’s leading cryptocurrency exchange, has witnessed a staggering 97% decline in trading volume compared to 2021, as regulatory pressure and a broader global slump in digital asset prices took their toll.

The exchange’s total trading volume for the year plummeted to $1 billion, a far cry from the record-breaking figures seen during the peak of the crypto frenzy. In contrast, the platform saw $43 billion in volume in 2021 and $10 billion last year, according to a recent report by TechCrunch.

The sharp decline in trading volume can be attributed to the mounting regulatory pressure faced by WazirX from Indian authorities, which has left the country’s once-thriving crypto sector fighting for survival.

The Bottom Line

As India’s regulatory crackdown on cryptocurrencies intensifies, it has cast a chilling effect on local investors who were once enthusiastic about supporting the country’s crypto startups. This unfavourable climate has made venture capital firms increasingly wary of exposure to the embattled sector.

Furthermore, many Indian crypto startups have chosen to flee the country. Dubai, the most populous city in the UAE, saw over 90,000 Indian companies registered with the Dubai Chambers, while the city’s largest tech event, GITEX, saw more than 300 Indian startups, a number that had tripled from last year.


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Ruholamin Haqshanas
Cryptocurrency journalist
Ruholamin Haqshanas
Cryptocurrency journalist

Ruholamin is a crypto and financial journalist with over three years of experience. Apart from Techopedia, he has been featured in major news outlets, including Cryptonews,, 24/7 Wall St, The Tokenist, Business2Community, and has also worked with some prominent crypto and DeFi projects.  He holds a Bachelor's degree in Mechatronics. Ruholamin enjoys reading about tech developments, writing, and nature-watching