More than 90% of domestic cryptocurrency transactions, or over ₹6 lakh crore, moved abroad.
India should not hesitate to regulate the cryptocurrency sector since it may lose out on innovation, talent, and value created through crypto transactions, especially since incoming US President Donald Trump is anticipated to issue administrative orders on the subject shortly and many other jurisdictions are taking a proactive stance. In an interview, CoinDCX CEO and co-founder Sumit Gupta tells Businessline. He also discusses the proposal to acquire the struggling cryptocurrency exchange WazirX. Quotes:
How does the industry promote itself to the Center before the Budget?
Roughly three years have passed since cryptocurrency transactions were subject to increased taxes. Crypto was not mentioned in the previous budget. I’m hoping that this budget will address cryptocurrency and ease the taxes on it.
Higher taxes have caused harm to domestic business, as we have witnessed. It is no longer economically advantageous for Indian clients to trade on local exchanges after the introduction of 1% TDS, increased taxes, and no loss offsetting. Approximately ₹6 lakh crore, or more than 90% of the volume, has moved overseas.
Higher taxes had unexpected implications that were extremely detrimental to the nation. First, the tax money is no longer there. I think businesses in the cryptocurrency area should be clean and compliant with regulations. Efforts must be made to guide the sector in that direction in order to keep bad actors out of the ecosystem.
In recent years, there has been a substantial shift in the crypto environment. It’s anticipated that incoming US President Donald Trump will issue a number of crypto-related executive directives. India shouldn’t be afraid to take a proactive stance when other jurisdictions are doing so.
Since many nations will have made headway in this area by 2026, I fear as an entrepreneur in this field that if we don’t work on it now, it will be too late. It is occurring very quickly, and I believe that many other nations will begin to take constructive action in 2025 in addition to the US. If taxes aren’t resolved right now, we’ll miss out on a lot of skill, innovation, and GDP-boosting value.
What is the current status of your offer to acquire WazirX?
Right now, I can’t comment because there isn’t enough specific information available. Many external dependencies exist. All I know is that the security incident has affected Indian consumers, which has a direct effect on user sentiment.
We are available to do whatever is necessary to restore consumers’ trust since we want to actively contribute to the ecosystem’s growth. We will win the business, of course, but we must take action as the market leader.
It’s not in my hands, to be honest. Numerous legal processes and other elements are involved. However, we are still willing to assist affected clients. To make up for any loss we can, we are even willing to pay out of pocket.
Given the size of the problem, I’m not claiming that we can complete it all, but by building a sizable platform, we can both directly and indirectly aid the affected users. The intention is there, but we could not know anything for a month or two after the court clearance.
Has the WazirX Chief discussed the intention with you?
Not in a proactive manner. I wish to maintain complete transparency. Some of our team members have discussed their thoughts about it in some of their chats. Clarity is what we desire for our community’s clients.
Even though WazirX was one of the biggest cryptocurrency exchanges, it was compromised. To what extent do big exchanges like yours have confidence that such hacks won’t happen?
There is no way to ensure complete safety. It is also true that Coinbase and Binance have had security breaches. How you respond is, in my opinion, what counts. Are you responding in a way that affects or does not affect your customers? You must be able to raise money or use your own reserves to cover losses, but you must not affect your consumers.
More adoption of such sort of approach is required, and the solution is to establish some kind of regulatory rules. I think WazirX could have handled the situation more skillfully. In our situation, we have put in place strong safeguards to protect our clients in the unlikely event of an occurrence.
A further degree of security is offered by the creation of the Crypto Investor Protection Fund. Additionally, client money is stored in secure wallets, guaranteeing that our consumers are never put through difficult times.
In 2025, how do you envision national and international crypto legislation developing?
I’m glad to hear that the new governor of the RBI values innovation and modern technologies. I’ve had a couple of opportunities to engage with him. He undoubtedly knows a lot more about this area.
The RBI’s stance on the use of cryptocurrency is evolving, and hopefully it will continue. Bilateral interactions between nations also take place. We are aware that several nations, both big and small, have publicly embraced this innovation and have entirely reversed their positions. In my opinion, India will open up gradually. ENDS