A balanced taxation framework, introduction of conducive crypto regulations and enabling entrepreneurship in the Web3 sector are some of the key representations that cryptocurrency exchange CoinDCX has made to the Centre for the Budget, co-founder and CEO Sumit Gupta tells Piyush Shukla in an interaction. Excerpts:

What are the key representations from the crypto industry to the government for the Budget?

Having a balanced taxation framework is good for the crypto ecosystem, and this is part of our representation to the Centre for the Budget. Secondly, the industry wants to be regulated and it is necessary with regard to customer protection. We have urged the government to launch a conducive regulatory framework. Globally, more and more countries are coming up with clearly-defined regulatory framework. The last request is to nurture entrepreneurship in the Web3 sector.

In early days of the internet, a lot of innovation happened outside India, primarily in the US. These companies are now worth trillions of dollars. The Web3 sector alone can add $1.1 trillion to India’s GDP and the government can help achieve that.  

How do we prevent Indian customers from using non-compliant foreign crypto exchanges for trading?

This is a very important issue. Esya Centre, a third party agency, conducted a lengthy analysis and recently came out with the report, saying that despite nine foreign virtual digital asset (VDA) exchange websites and apps being officially blocked from operating in India in January 2024, non-compliant exchanges still saw large increases in trading volumes by Indian users, which can mainly be attributed to the changes in the VDA tax architecture announced in the FY23 Budget.

Those are real numbers. A lot of customers from India  have been using foreign exchanges because taxation is high domestically and the regulatory framework is opaque. This is not safe from the customer point of view. These are Indian funds, they should remain in India. The government intervention is needed to ensure that. Customers must only interact with regulated and compliant VDA service providers.

What was the rationale behind acquiring Dubai-based crypto exchange BitOasis?

We have been investors in BitOasis and were interacting with the team for almost two years. After the initial investment, we have seen the progress that the company has made. Besides being profitable, it is very strong financially. It operates in one of the fastest-growing crypto markets globally. We wanted to work with BitOasis more deeply. So, we first made a strategic investment which naturally evolved in a completed acquisition.

Over the last six-plus years, we have grown from a small startup to being India’s largest crypto exchange and a dominant Web3 force. Global expansion has always been a part of our growth strategy. With this acquisition, we will leverage our domestic technology and capabilities built for Indian markets in the Middle East and North African (MENA) countries.

Will you retain the existing team at BitOasis?

The leadership team and existing employees at BitOasis will continue to be there. We are actually ramping up the team at BitOasis with fresh capital. The strategy of the company will also continue, the only addition is the technology that CoinDCX will bring to the table, subject to their local regulatory approvals.

What are your plans?

We are increasing the breadth and depth of our products. We have worked on introducing the Web3 mode on CoinDCX app. The thought process was to enable Web3 access directly to our 15-million customer base right in the product itself. We are constantly introducing new products. We are making efforts for grassroots adoption of Web3.