WazirX, an Indian cryptocurrency exchange, announced the closure of its NFT marketplace, claiming weak market and user adoption. The decision comes a year after India placed 30% taxes on crypto profits, which crushed crypto trading volumes in the South Asian country.
Indian Taxation Continues to Harm Regional Cryptocurrency Market
Less than two years after its establishment, Mumbai-based cryptocurrency exchange WazirX has shut down its NFT marketplace. Despite being the first NFT platform in India, WazirX stated in the Wednesday notice that the market "did not garner much traction." WazirX stated in the announcement:
“We regret to announce that the WazirX NFT Marketplace has been sunsetted. We are proud to have launched India’s first NFT Marketplace in June 2021, which showcased the work of many creators.”
Up until last year, when the government enacted a strict tax regime that severely hurt the platform's trading volumes, WazirX was India's largest cryptocurrency exchange. The crypto exchange faced significant challenges as a result of this and a significant decline in the worldwide crypto market.
The Indian government unveiled the Union Budget for 2022 a year ago, which included additional taxes on digital asset profits of up to 30%. The new system was put in place, according to the nation's finance minister Nirmala Sitharaman, as a result of a significant rise in "virtual digital assets transactions."
The new tax system quickly had an effect on India's crypto trade volume. More precisely, it led to the migration of roughly $3.8 billion in trading volume by Indian cryptocurrency traders to foreign cryptocurrency exchanges since February 2022.
WazirX Problems Continue as Conflict with Binance Grows
In the midst of an ongoing disagreement with Binance that first surfaced in August 2022 when Changpeng "CZ" Zhao claimed Binance didn't control the Indian cryptocurrency exchange, Wazirx has decided to shut down its NFT marketplace.
The two companies have been holding secret negotiations to address the ownership issue until last month when the world's biggest crypto exchange handed WazirX a notice to retract its "false and misleading narrative" or stop utilizing Binance's wallets by Feb. 3. On that date, however, Binance declared it was making an exception, encouraging WazirX to "work out arrangements to withdraw any remaining funds in the relevant accounts."
Investors were assured that they should not be concerned by Binance's news by WazirX, which responded by stating that it had started shifting assets to multi-signature wallets. WazirX, however, wrote a blog post a few days later accusing Binance of making "false and baseless" claims and stating that it will take the required actions to seek redress and defend its legal rights.