CoinDCX, a top Indian cryptocurrency exchange, is slashing 12% of its staff as a prolonged bear market and the nation’s tax policies impact revenue.
Founded in 2018 by Neeraj Khandelwal and Sumit Gupta, the Mumbai-based cryptocurrency exchange employs approximately 590 people. The company’s decision to lay off 71 employees across various teams mirrors a shift in its current business priorities.
The latest development comes in the wake of a prolonged bear market in the cryptocurrency sector and India’s stringent tax policies, which have led to a fall in revenue.
The Indian government has imposed a 30% tax on crypto profits and a 1% tax deducted at source (TDS) on all transactions since Feb.1, 2022. These measures, particularly the TDS, have had a dramatic effect on trading volumes, pushing India’s crypto exchanges into what many are calling “survival mode.”
“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 … we have made the difficult decision to resize certain teams and to steer the business towards a profitable and sustainable growth.”CoinDCX founders Sumit Gupta and Neeraj Khandelwal.
CoinDCX, which became India’s first crypto unicorn in 2021 with a valuation of $1.1 billion, faced scrutiny last year when the Enforcement Directorate (ED) requested documents related to a Foreign Exchange Management Act (FEMA) case. However, the company maintained that its approach has “always been one of transparency” and responded to government queries accordingly.
The founders have assured no further plans for team reduction and emphasized that the decisions were made after thorough discussions and close collaboration with senior leaders.
Laid-off employees are being offered support and resources, including full notice period severance pay, an extra month of salary, owed variable pay and incentives, encashment of unused leave, extended health insurance and wellness benefits, and access to counseling support.