Just-In: CoinDCX Raises $135 Mln Despite India’s Crypto Limbo

Indian crypto exchange CoinDCX said on Tuesday it raised $135 million in its latest funding round. Tech-focussed venture capitalists Pantera and Steadview led the round, with participation from Kingsway, DraperDragon, and Republic.

The raise, which was announced in a press release, brings CoinDCX’s total value to over $2 billion, making it India’s largest crypto exchange. The firm had achieved unicorn status in August 2021, after a funding round led by B Capital Group.

The exchange said it will use the new funding to triple its employee strength to over 1000 by the year-end.

India’s crypto stance in limbo

But the move also comes amid widespread uncertainty over the Indian government’s stance on crypto. A flat 30% tax on crypto gains, introduced this year, suggests that the government is trying to dissuade people from trading in the space.

The country is still drafting comprehensive regulation over the space. But comments from government officials suggest that India may introduce more curbs.

CoinDCX, along with most other Indian crypto exchanges saw their trading volumes plummet in April, as the tax took effect. 30% is among the highest tax brackets on investments, and will be levied on all crypto gains, regardless of size.

Data from Nomics shows that the exchange’s daily volumes had plummeted to a three-month low of $3.3 million.

Indian crypto exchanges had recently also blocked deposits through the country’s nationalized payments interface, UPI. The move was sparked by India’s payments regulator saying it was unaware of  any crypto firms using UPI- further highlighting the regulatory confusion faced by local crypto firms.

India’s central bank has called for a blanket ban on cryptocurrencies, calling them a financial risk.

India still holds crypto potential, says CoinDCX

CoinDCX flagged massive potential in India’s crypto adoption. It intends to work with the government in enhancing its anti-money laundering compliance, as well as passing friendlier laws for crypto. CoinDCX said in a press release:

The latest round has also helped CoinDCX in reaffirming the global investor sentiment on the potential for India in the industry.

Despite the regulatory uncertainty, India’s population has adopted crypto at an accelerated pace. The country is ranked second on Chainalysis’ 2021 index of crypto adoption. Roughly 20 million Indians began using crypto in 2021.