Indian cryptocurrency exchange, WazirX, co-founders Nischal Shetty and Siddharth Menon have shifted their base to Dubai from India, according to news reports.
Sources said that Shetty and Menon have moved out of India with their families to Dubai, although WazirX still has an office in Mumbai and Bengaluru. Sameer, Mhatre, the co-founder and Chief Technology Officer at WazirX, however, continues to operate from India, multiple sources in the knowledge of the matter told Business Today.
From April 1, the government announced a 30 percent tax on any income from the transfer of virtual digital assets, specifying that no deductions and exemptions will be allowed. This has hit hard private cryptocurrency exchanges and apps.
"No Crypto bill but taxation at 30 percent of virtual asset transfer gains and an additional 1 per cent tax collection at the time of transfer means that party seems to be over for crypto assets and exchanges,” former Union Finance Secretary Subhash Chandra Garg, a key figure behind drafting the original Crypto bill, told IANS.
Brain Drain 2.0 has commenced, says Raj Kapoor, Acryptoverse
Not just Nischal and Wazir X, we are seeing an exodus of startups, crypto, NFT, blockchain and Web 3.0 talent flocking the Dubai shores, said Raj Kapoor, strategic advisor, Acryptoverse. Grey zone policy decisions, a 30 percent tax bracket, TDS, ambiguity in all aspects. Conflicting reports and statements by regulatory authorities have not helped in any way.
The ED’s showcause notice for violating provisions of the Foreign Exchange Management Act, for cryptocurrency deals worth Rs 2,790.74 crore has long been a pressing issue for WazirX as well, he said.
The uncertainty over India’s position on the blockchain and crypto space has cast a shadow over its future in the country, forcing entrepreneurs to consider other countries to set up shop.
The RBI Governor Shaktikanta Das has also taken a strong stance thatcrypto is a big threat to the country’s financial and macroeconomic stability and warned investors that the digital currency "does not have any underlying asset, not even a tulip"—referring to a 17th century Dutch tulip price bubble, said Kapoor.
Young entrepreneurs are tired of waiting. India's loss is turning out to be other countries' gain as lucrative offers and regulatory clarity seem to be draining the talent from the country. Eventually, India will end up getting the short end of the stick, he added.
With crypto friendly policies and environment, no dearth of crypto talent and strong and clear governance in place, Dubai is now becoming thr default crypto destination. India is missing the bus here and these developments are yet another indication. A harbinger of things to come, said Kapoor.
