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Domestic cryptocurrency exchanges in a bid to attract cryptocurrency traders and investors to their platforms are offering incentives in the form of bonuses and cashback on crypto deposits and reimbursement of transfer fees. This comes as exchanges are vying to lure in a large chunk of users, who are looking for alternative platforms after the Indian government cracked down on offshore exchanges.
CoinDCX, for instance, has earmarked $1 million Treasury Fund to facilitate asset transfers for investors from offshore exchanges, and is utilising it to offer 1 per cent bonus on all crypto deposits made between January 9 and 17.
Similarly, its peer CoinSwitch has announced a 2 per cent guaranteed cashback for crypto deposits to CoinSwitch PRO, its advanced trading platform, “to incentivise responsible trading.”
Exchange BuyUcoin also said it will reimburse the withdrawal fees for users incurred during the transfer of assets from offshore platforms and will offer a 1 per cent bonus on the transfer of digital assets.
The FIU IND had previously issued compliance show cause notices to nine offshore exchanges for violation of the Prevention of Money Laundering Act 2002 (PMLA). It had also written to the IT Ministry to block the URLs of the said entities. In the aftermath of the move, global exchanges such as Binance, Kucoin and OKX were removed from Apple’s App Store and their websites too were subsequently blocked in India.
Surge in crypto deposits
These developments have resulted in large trading volumes - which had shifted to offshore exchanges after introduction of taxation - moving back to FIU-IND complaint domestic exchanges.
CoinDCX reported that it saw a 2000 per cent surge in crypto deposits since December 28 on its platform. “This significant uptick is attributed to escalating apprehensions among users regarding non-compliant offshore exchanges, intensified by the recent issuance of compliance Show Cause Notices by the FIU IND,’ it said.
CoinSwitch too said it recorded a sequential growth of 200 per cent in trading volumes in Q3 2023, as “Indian crypto investors turned bullish ahead of the launch of Bitcoin ETFs and the 2024 Bitcoin Halving.”
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