Indian cryptocurrency exchange, WazirX, has shut down its non-fungible tokens (NFT) marketplace due to a lack of traction.
The NFT marketplace of WazirX has been shut down, as per the message displayed on the website. However, users can continue to trade their NFTs on OpenSea by following the provided link. This allows them to buy or sell their previously purchased NFTs from the WazirX marketplace.
The company has already seen a significant reduction in its trading volumes since the implementation of a 30% income tax on profits and a 1% TDS on all virtual digital asset transactions last year by the Indian government.
WazirX launched its NFT marketplace in June 2021 to enable the exchange of digital assets and intellectual properties like art pieces, videos, programs, tweets, and other digital goods and services.
The NFT marketplace was shut down with immediate effect. The company has stated that it is proud of its contribution to the NFT sector in India and the platform it provided for creators to showcase their talent, despite not gaining much traction.
WazirX was launched in 2018 and was India’s largest cryptocurrency exchange until the introduction of new tax regulations, which led to a significant drop in its trading volumes. The platform has also been involved in a public dispute with Binance over the ownership of the exchange.
The dispute between WazirX and Binance regarding the ownership of Zanmai Labs, a company co-founded by Nischal Shetty, the founder of WazirX, and the parent company of the cryptocurrency exchange, is yet to be resolved. The controversy began in August 2022 on Twitter and relates to the alleged acquisition of WazirX by Binance, which was first announced in November 2019.
The decision to close the NFT marketplace highlights the challenges faced by the Crypto sector amid high taxes, regulatory uncertainties, and market volatility. The regulatory landscape in India is currently uncertain, with the country proposing a cryptocurrency bill that would ban all private cryptocurrencies and create a framework for an official digital currency.
The proposal has been met with criticism from industry experts, with some warning that it could lead to a brain drain of crypto talent from the country.
WazirX’s shutdown of its NFT marketplace is part of a wider trend of cryptocurrency companies struggling to operate in India. The country’s stance on virtual digital assets has left the industry in a precarious position, with many companies struggling to stay afloat.
Despite the challenges, WazirX has continued to publish proof of its reserves to alleviate user anxiety amid multiple controversies. As of February 22, 2023, the company’s total reserves stood at $315.6 million, with only about $9.8 million parked on the exchange. The rest was held on the blockchain.
The closure of WazirX’s NFT marketplace is a blow to the company’s efforts to expand its offerings beyond traditional cryptocurrencies. However, the company remains committed to providing a platform for users to trade virtual digital assets in India. It remains to be seen whether the company will be able to weather the regulatory and economic challenges facing the crypto industry in India.
The closure of WazirX’s NFT marketplace comes at a time when the virtual digital assets sector is facing increasing regulatory pressure and tax burdens in India. The country’s government has been taking a hard line on cryptocurrencies and other virtual assets, with a proposed bill that would ban all private cryptocurrencies and provide a framework for the creation of a central bank digital currency (CBDC).
WazirX has faced intense scrutiny from the Indian government as well. The Enforcement Directorate (ED) froze assets totaling INR 64.67 crore in connection with a money laundering case just hours before the well-known series of tweets by Zhao in August. WazirX was also issued a show-cause notice by the ED in June 2021 for transactions worth INR 2,790.74 crore, which is still an ongoing case.
The company has already laid off a significant number of employees to cut costs, and the closure of the NFT marketplace may be a sign that the company is looking to further streamline its operations.
Despite these challenges, WazirX remains one of the leading players in the Indian crypto market, with a significant user base and a range of products and services for traders and investors. The company has also taken steps to reassure its users by publishing proof of reserves, showing that it has adequate funds to cover all user deposits and withdrawals.
As the crypto industry continues to evolve and adapt to changing regulatory landscapes and market conditions, it remains to be seen how WazirX and other players in the Indian market will navigate these challenges.
However, with its experienced team and strong track record, WazirX is well-positioned to weather the storm and emerge as a leader in the Indian crypto ecosystem.