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Binance Holdings Ltd. billionaire CEO Changpeng Zhao is tightening his grip on the Indian cryptocurrency trading market following a major tax change.

Binance app downloads in India jumped to 429,000 in August, the highest this year and almost triple that of second-placed CoinDCX, according to data from market intelligence firm Sensor Tower. Only Binance among the top exchanges saw higher downloads in India compared to July.

The operator of the world’s largest crypto exchange stands out in a market where rivals are reeling from high taxes and the difficulty of moving money to and from trading platforms. Daily volumes on major India-based platforms have fallen by more than 90% since a 1% tax on crypto transactions took effect in July.

While Zhao has overwhelmed its competitors with low fees, varied offerings, and a popular peer-to-peer marketplace that allows for easier movement between tokens and cash, another factor is the contrast in how exchanges foreigners and those with Indian roots manage the transaction tax imposed on national residents.

Indian-based platforms have started to deduct the tax, but many foreign peers like Binance and FTX have not, prompting investors to switch to the latter, according to several users of the apps who have asked to remain anonymous as the case concerns tax law. Merchants may see a loophole in lax enforcement and a gray area in whether the law applies to more complex transactions.

“Recent tax regulations are not explicitly clear as to whether the 1% withholding tax extends to crypto derivatives transactions involving futures contracts, as it does for spot crypto transactions” , said Rohan Misra, managing director of SEBA India, a subsidiary of Swiss. SEBA Bank AG.

Binance is “currently monitoring the situation and will make further announcements in due course,” a spokesperson said in response to questions about whether it had started collecting the tax. FTX declined to comment and India’s finance ministry did not respond to emails seeking comment.

Binance’s gains come amid a rare public feud with WazirX, its partner in India, which led to Zhao encouraging WazirX customers to defect to Binance. WazirX’s monthly downloads dropped to 92,000 in August from around 596,000 in January.

The 1% levy known colloquially as TDS comes on top of a new 30% tax on gains from the transfer of crypto assets, which is higher than in many other jurisdictions like the United States and the UK.

The rules introduced this year also prevent crypto trading losses from being offset against revenue. Additionally, the limited support from the banking system makes it difficult to fund accounts or switch from tokens to fiat currency.

The wider adoption of the Binance app contrasts with the declines of most other players. CoinDCX downloads, for example, fell to 163,000 in August from 2.2 million in January, according to data from Sensor Tower.

Billionaire Sam Bankman-Fried’s FTX saw almost 96,000 downloads in India in July and 52,000 in August compared to around 40,000 in January.

San Francisco-based Coinbase Global Inc. said it complied with tax rules on crypto transactions. It saw downloads in India drop to 16,000 in August from nearly 31,000 in June.

This story was published from a news feed with no text edits. Only the title has been changed.

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