After the recent crash in cryptocurrency prices…the “Vauld” trading platform stops withdrawals
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Answer After the recent crash in cryptocurrency prices…the “Vauld” trading platform stops withdrawals
India-Singapore Vauld is one of the newest cryptocurrency exchanges in a growing list of platforms that have announced they are suspending operations in the face of the market crash.
The platform’s statement said it suspended withdrawals earlier on Monday, citing the pressure of extreme market volatility.
The platform said it has faced withdrawals of nearly $200 million since the collapse of Project Terra, which caused a severe liquidity crunch.
It also reduced 30% of its staff last month due to unfavorable market conditions.
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But apart from the collapse of cryptocurrency prices, there may be other regulatory factors that caused their collapse, especially in the Indian environment which is witnessing tightening and strict control of cryptocurrency exchanges.
Indian cryptocurrency exchanges face severe regulatory headwinds:
The Indian government has cracked down on the cryptocurrency market this year with a series of new tax laws.
The cryptocurrency trading space is now subject to a 30% tax on all cryptocurrency gains, starting in July, while a 1% tax has been imposed on all crypto transactions.
Additionally, the government is also planning to introduce a GST of 28% on cryptocurrencies later this year.
Major Indian cryptocurrency exchanges, such as WazirX and CoinDCX, have seen a nearly 70% drop in their daily volumes over the past week, following the introduction of a 1% tax on July 1.
As of Monday, trading volumes on WazirX and CoinDCX were around $3 million and $1 million, respectively.
Whereas two weeks ago, both of them traded around $20 million.
The tax laws seem to have affected Indian cryptocurrency traders, in line with the government’s tough rhetoric against the crypto space.
Read:Despite the price drop…One of the Bitcoin indicators is very bullish
This, in turn, has put pressure on most cryptocurrency exchanges in the country.
In addition to tight regulation, a major crash in cryptocurrency prices has put pressure on cryptocurrency exchanges around the world, as global cryptocurrency trading volumes have been steadily declining in recent weeks.
As a result of the crash, several cryptocurrency lenders such as Celsius and Voyager Digital have suspended withdrawals.
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