India-focused crypto exchange ZebPay has applied for a license in Singapore and is planning a similar move in the UAE. The trading platform’s decision, founded in 2014, to seek a license to operate in another country comes on the heels of a drastic fall in trading volume, which some reports suggest is as much as 90%, media reports said.
Singapore and UAE are fast emerging as the favourite destinations for crypto firms to set up shops and start operating. The regulatory environment in both countries is transparent, if not very friendly, too.
ZebPay’s decision to seek a permit in Singapore was shared by Avinash Shekhar, the outgoing CEO, in an interview with Bloomberg. Shekhar plans to start a web3 venture with seed money from ZebPay. He is also considering an overseas location for his venture.
In line with what Indian crypto entrepreneurs think, in general, about the decline in trading volume, Shekhar, too, pointed out a 1% transaction fee driving away investors from Indian crypto exchanges. Since this tax became effective beginning July 1, 2022, trading volume has declined sharply across all Indian crypto exchanges.
Besides, these trading platforms also have difficulty accessing regular banking services and 30% capital gains tax without the provision to offset losses.
Given the declining volume, WazirX has recently announced a 40% reduction in its workforce. ZebPay has implemented a 6% job cut in non-managerial positions.
Indian crypto exchanges and firms are also facing heat from the financial crime investigating agency — the Directorate of Enforcement — for being used for money laundering. The agency has raided WazirX, CoinDCX, and Vauld in the recent past.
These raids and, in some cases, freezing of bank accounts have followed crypto exchanges asked to implement more stringent norms for customer data safety and tracking of transactions.