CoinDCX buys BitOasis, amidst plans of Middle-East expansion

By Sidhartha Shukla

Indian crypto exchange CoinDCX has acquired Dubai-based BitOasis, a first step in the company’s plans to expand globally.

The purchase will give CoinDCX, which first invested in BitOasis last year, a “formidable foothold across the MENA region, catering to a diverse range of retail and institutional clients,” the Indian firm’s co-founder Sumit Gupta said in a statement. The company didn’t disclose the terms of the deal.\

The purchase comes as Dubai vies with the likes of Singapore and Hong Kong to establish itself as a nexus for crypto businesses. CoinDCX has identified regions that offer clear regulatory frameworks for crypto operators and is targeting them for expansion through mergers and acquisitions, Gupta said in an interview with Bloomberg News.

Launched in 2016, BitOasis operates in countries such as the United Arab Emirates, Saudi Arabia, Bahrain and Kuwait. Since inception, the exchange has processed over $6 billion (Rs 50,102 crore) in trading volume while raising more than $40 million (Rs 334 crore) in venture funding from investors, according to the statement.

License Regained

Last July, BitOasis had its “minimum viable product operational license” suspended by Dubai’s Virtual Assets Regulatory Authority — or VARA — after falling short of local requirements. The license has since been reinstated, allowing the exchange to reopen its platform for new retail and institutional users. BitOasis also secured a license from the Central Bank of Bahrain.

The suspension of the license imposed some limitations on acquiring new users, but allowed the exchange to continue serving existing clients, Ola Doudin, co-founder and CEO of BitOasis, said in an interview.

“Despite this slight hiccup, we haven’t really seen significant churn from our customers or assets leaving the platform,” Doudin said. ”In fact, over the last six months, our average monthly trading volume has grown by over 100 per cent, and our assets under custody have continued to increase, now exceeding $210 million (Rs 1753 crore).”

Doudin added that BitOasis has over 750,000 customers, with the majority of its $6 billion (Rs 50,102 crore) in total trading volume generated over the past 18 months.

BitOasis’ brand and leadership team will remain unchanged following the acquisition, according to the statement. Based on current market conditions, Gupta estimates that BitOasis may generate an extra $30 million (Rs 250 crore) to $50 million (Rs 417 crore) in annual revenue for CoinDCX.

CoinDCX began operations in 2018 and became India’s first crypto unicorn — a private startup valued at more than $1 billion (Rs 8,350 crore) — in 2021. But the company and local rivals suffered a drop in revenue after India introduced a tax regime in 2022 that imposed a 1 per cent tax on crypto transactions as well as a flat 30 per cent levy on any crypto-related gains, eviscerating volumes on domestic exchanges.

There are no such taxes in the United Arab Emirates “so people continue to trade there,” Gupta said.

Crypto mergers and acquisitions as well as potential initial public offerings are making a comeback following a revival in the digital-asset sector. Bitcoin has more than tripled since the start of 2023 in a recovery from a bear market.