Indian and Singaporean firm  Vauld is the latest in a growing list of crypto exchanges to suspend their operations in the face of a market crash.

The exchange- which is exposed to Indian and Singaporean markets- said it had suspended withdrawals earlier on Monday, citing pressure from extreme market volatility.

The exchange said it had faced nearly $200 million in withdrawals since the Terra crash, which caused a severe liquidity crunch. It had also cut 30% of its headcount last month citing unfavorable market conditions.

But beyond the crypto crash, there may be other, regulatory factors in play that caused its downfall.

The factors, which are endemic to India, may also affect other crypto exchanges operating in the country. Recent data shows that trading volumes in the country have dropped sharply this month.

Indian crypto exchanges face severe regulatory headwinds

The Indian government has severely cracked down on crypto this year through a series of new tax laws. The space is privy to a 30% tax on all crypto gains, and, from July, a 1% tax on all crypto transactions.

In addition to this, the government is also planning to impose a 28% goods and service tax on crypto later this year- the highest bracket in the country.

Major Indian exchanges WazirX and CoinDCX witnessed a roughly70% drop in their daily volumes over the past week, after the 1% tax went live on July 1.

As of Monday, trading volumes on WazirX and CoinDCX were about $3 million and $1 million, respectively. Two weeks ago, they were around $20 million each.

The tax laws appear to have dissuaded Indian crypto traders, falling in line with the government’s harsh rhetoric against the space. This in turn has pressured most crypto exchanges in the country.

Market crash also pressures exchanges, volumes

A major crash in crypto prices has pressured crypto exchanges across the globe, with India being no exception. Global crypto trading volumes have also steadily declined in recent weeks, as the market fell into a tight, depressed trading range.

As a fallout of the crash, several crypto lenders such as Celsius and Voyager Digital also suspended withdrawals.

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