Indian crypto exchange WazirX saw its trading volume nosedive to $1 billion in 2023 a massive 90 per cent drop from 2022 amid regulatory pressure from the government and a heavy crypto tax regime.
Last year, the Indian government introduced a 30 per cent tax on virtual currencies and a 1 per cent deduction for every crypto transaction. According to TechCrunch, the crypto trading on Nischal Shetty-run WazirX was down 90 per cent compared to 2022, when volumes hit $10 billion and 97 per cent lower than $43 billion in 2021.
Last year, the Enforcement Directorate (ED) investigated several cases under the provisions of Prevention of Money Laundering Act, 2002 (PMLA) and Foreign Exchange Management Act, 1999 (FEMA) related to cryptocurrencies.
WazirX’s accounts worth Rs 64.67 crore were frozen in August last year after the ED launched a money laundering investigation into the crypto exchange's alleged role in assisting 16 Indian fintech firms and loan apps by transferring money for them to unknown foreign wallets, according to reports.
The ED later lifted the ban on WazirX accessing its bank accounts, allowing the crypto exchange to resume its banking operations. “Due to the active cooperation extended by Wazir X and active anti-money laundering checks that led to the blocking of suspicious accounts, ED has unfrozen the bank accounts. WazirX is now in a position to continue its banking operations as usual," the company had said.
Earlier this year, WazirX had a tussle with global crypto company Binance. Binance stopped providing wallet services to WazirX, asking it to withdraw any remaining assets held in Binance wallets. WazirX said that allegations made by Binance were false and unsubstantiated.