India’s CoinDCX crypto exchange announced the layoff of 12 percent of its workforce on Tuesday. A total of 71 staff members have been impacted by the decision. The crypto exchange, in its official statement, said that India’s TDS (Tax Deducted at Source) deductions on each crypto transaction has slowed down its business, especially during the ongoing bear market. CoinDCX has said that India’s tax policy governing crypto transactions is leaving a lasting impact on domestic exchanges.
“Today we are making the difficult decision to reduce the size of our team by about 12 percent,” CoinDCX said in its statement. “As you all know, startups and businesses globally are going through challenging times due to tough macro conditions, more so in crypto because of the prolonged bear market and impact of TDS on domestic exchanges. These factors had a significant impact on our volumes and thus revenues.”
India’s finance ministry, last year, enforced one percent TDS on each crypto transaction including crypto buying, selling, as well as transferring crypto to a digital wallet. This rule aims to maintain a trace of crypto transactions, that are largely unregulated and anonymous in nature.
Since India is still in the process of formulating rules to monitor the crypto sector, finance minister Nirmala Sitharaman deemed it necessary to bring this rule so that cryptocurrencies are not exploited for unlawful transactions like money laundering or terror financing.
Despite outcries from members of the crypto community to revise this TDS rule and reduce the 30 percent taxation on crypto incomes, the Indian government remained firm on its policy making.
Reeling under market pressure, CoinDCX is now determined to focus on keeping its finances as well as operations afloat, amid the ongoing slump in the crypto market. In the backdrop of back-to-back interest rate hikes in the US as well other macro-economic factors, Bitcoin is currently trading at its two-month low price point of $26,000 (roughly Rs. 21 lakh).
“We continue to remain bullish on the India opportunity and committed to our mission of driving crypto and web3 adoption to 50 million people by 2025. We also want to assure you that no further team reduction is planned,” the company noted in its statement.
The exchange said that it will provide affected employees severance pay equivalent to the full notice period, additional one month of salary, and other benefits, along with access to counselling support.
Gadgets 360 also reached out to CoinDCX with a set of queries about the layoffs. The story will be updated with the firm’s response.
Meanwhile, members of India’s crypto fraternity are posting encouraging words to the staff members impacted by CoinDCX’s decision.
To those impacted by CoinDCX layoffs, keep your spirits high :raised_hands:
A mix of market volatility, regulatory challenges, and global stagnation are the driving forces.
But without a doubt, the Indian government’s draconian stance on crypto is a crucial factor, forcing layoffs and…
— Kunal Gandhi (@kunalvg) August 22, 2023
Sad to hear about the layoffs at Coindcx. I hope those affected land on their feet soon. Wishing the team strength during this challenging time.
— Crypto Empire | AMA + Spaces (@Empire8x) August 22, 2023
Headquartered in Mumbai, Maharashtra, CoinDCX was co-founded in 2018 by Sumit Gupta and Neeraj Khandelwal.
In April last year, CoinDCX’s valuation touched $2.15 billion (roughly Rs. 17,829 crore) after it bagged $135 million (roughly Rs. 1,119 crore) in a Series D funding from companies like Pantera, Coinbase Ventures, Kingsway, DraperDragon, Republic Capital, and Kindred Ventures.