Indian crypto exchanges are experiencing a significant uptick in activity following the Financial Intelligence Unit’s (FIU) recent actions against several global crypto exchanges. The FIU’s decision to issue compliance show-cause notices to these exchanges, coupled with a request to block their URLs for non-compliance with Indian regulations, has triggered a notable migration of funds to domestic platforms. CoinDCX and Mudrex, among others, have reported substantial increases in deposits and user registrations.
CoinDCX, a leading Indian exchange, witnessed a remarkable 2000% increase in crypto deposits since the FIU’s announcement on December 28, 2022. This surge is attributed to the exchange’s status as the first FIU-registered entity and its emphasis on compliance and security. Additionally, the user-friendly process of transferring virtual digital assets from other platforms to CoinDCX has enhanced its appeal. The exchange’s co-founder & CEO, Sumit Gupta, highlighted the growth in deposits and signups, reflecting a shift in investor priorities towards platforms prioritizing regulatory compliance.
Impact across the Indian crypto market
The ripple effect of the FIU’s actions extends beyond CoinDCX. Mudrex, another global crypto investment platform, reported a sudden influx of $1 million in crypto deposits, with a significant number of new users joining the platform. Mudrex’s appeal lies in its zero fees on crypto deposits and a user-friendly interface, attracting both seasoned investors and newcomers.
Other Indian crypto exchanges like CoinSwitch and WazirX have also seen increases in trading volumes and crypto deposits. CoinSwitch, for instance, experienced a 30-35% surge in trade volumes, while WazirX reported a 250% increase in crypto deposits, with a notable rise in average transaction amounts. Smaller exchanges like BuyUcoin are also benefiting from this trend, with BuyUcoin’s CEO Shivam Thakral confirming a 2.5x jump in trading volume on their platform.
Looking ahead
The future of Indian exchanges in the cryptocurrency market will largely depend on ongoing regulatory developments. If regulatory uncertainties continue and actions against non-compliant foreign exchanges persist, users will likely keep moving their funds to compliant and secure platforms like CoinDCX. The appeal of Indian exchanges could be further bolstered by features like user-friendly interfaces and zero deposit fees.
However, the inherent volatility of the crypto market, influenced by global factors and market trends, adds an element of unpredictability. The future trajectory will also hinge on how regulatory policies evolve and whether the government provides clearer guidelines for crypto trading. The safety and convenience offered by Indian exchanges compared to offshore platforms will play a crucial role in sustaining this surge.
Also, while the current trend points towards a positive outlook for Indian exchanges, the long-term surge will be contingent on the interplay of regulatory developments, market dynamics, and the continued appeal of these platforms to users in terms of security, ease of use, and compliance.
