FTX Could Make First Entry Into India
According to a report by TechCrunch, MPL is seeking funds from new and existing investors, as the Bengaluru-based startup is reportedly planning to launch play-to-earn (P2E) and non-fungible token (NFT) enabled games before the end of 2022.
The Indian company operates over 60 mobile games, with MPL stating in December 2021 that it had more than five million monthly active cash playing users.
Meanwhile, anonymous sources revealed that the mobile gaming startup is seeking to raise fresh investment as an extension of its Series E funding round, at a valuation of $2.5 billion. One potential investor is the crypto exchange FTX. MPL is already backed by Sequoia Capital India and RTP Global.
If FTX invests in the gaming startup, it would mark the exchange’s arrival into the Indian startup space. The cryptocurrency exchange has been expanding its footprint across the globe and is valued at $32 billion as of January 2022. Meanwhile, FTX did not respond to comments concerning the reported MPL investment.
Coinbase, another cryptocurrency exchange giant, also announced via a blog post that it was planning to expand its workforce in its India tech hub. The exchange’s Indian hub currently has 300 full-time workers in different states and regions. According to the blog post:
“We are excited to tap into the dynamic Indian software talent to build out our products and will continue to invest heavily in our India hub. We have ambitious plans for India and seek to hire over 1,000 people in our India hub this year alone.”
Coinbase is also planning to host a crypto community event in Bangalore on April 7, with a discussion focusing on “the future of Web3 and cryptocurrency.”
Meanwhile, the company’s investment arm, Coinbase Ventures, has injected $150 million into Indian home-grown tech startups in the crypto and Web3 space. The venture arm has invested in Indian cryptocurrency unicorns such as CoinDCX and CoinSwitch Kuber.
Indian Crypto Sector Burdened by Unfavorable Tax Policies
Although the Indian cryptocurrency space continues to attract major crypto companies, government policies remain unfavorable for the burgeoning sector in the country.
In February 2022, India’s Finance Minister Nirmala Sitharam proposed a 30% tax on income from the transfer of digital assets. The Minister also suggested a one percent tax deducted at source (TDS) on all crypto transactions.
The 30% tax policy came into effect on April 1, 2022, with the government earlier clarifying that traders cannot offset their losses in one trade against gains in another crypto transaction. Following the implementation of the tax policy, trading volume on crypto exchanges plummeted.
According to a screenshot on Twitter shared by Aditya Singh, co-founder of YouTube channel Crypto India, major exchanges in India such as CoinDCX, WazirX, ZebPay, and BITBNS suffered a sharp decline in their volumes after the 30% crypto tax took effect.
The one percent TDS will be effected on July 1, 2022. However, crypto stakeholders, tax lawyers, and analysts predicted that the TDS will quickly suck liquidity from the cryptocurrency market.
WazirX’s CEO Nischal Shetty said the TDS is “the worst-case scenario for the industry.”
Whether or not India’s restrictions will loosen up as a result remains to be seen, just as MPL continues to wait for word on an investment from FTX.
For more about India’s negative response to cryptocurrency, read about how India’s central bank referred to crypto as a Ponzi Scheme.
Want to learn more about FTX? Check out this article about how FTX is planning to establish a regional HQ in Dubai.