- CoinSwitch cut 8% of its workforce.
- The staff losses were concentrated in customer service roles.
- Rival crypto exchange CoinDCX announced a similar 12% reduction in staff on August 22.
Indian crypto exchanges are feeling the pressures of crypto winter, with Mumbai-based research firm CREBACO noting a 97% decline in Indian exchange volume between January and December 2022. The country’s punitive local tax policy and depressed market activity are regularly cited as factors for the downtrend, with Indian crypto firms struggling to stay afloat. Following the recently revealed struggles of CoinDCX, rival exchange CoinSwitch has become the latest victim of the sector’s hardships in the region.
CoinSwitch Cuts 8% of Workforce
Owing to the depths of crypto winter, CoinSwitch has elected to carry out an 8% reduction in headcount, cutting 44 staff members to balance the books, according to The Hindu Business Line.
A CoinSwitch spokesperson stated that a business evaluation had led to the decision to “right-size” its customer support team in line with the volume of queries it presently receives. The spokesperson added that “many support team members” were reassigned across the company over the past year. Those affected by the cuts have CoinSwitch’s extended support, including an option for the company to rehire said individuals should activity return to previous levels.
“As and when volumes grow and new roles can be opened, CoinSwitch will be happy to welcome back those impacted,” remarked a CoinSwitch spokesperson.
The announcement comes a week after rival exchange CoinDCX implemented a 12% reduction in headcount, equating to the loss of 70 staff members. The CoinDCX founders blamed harsh macroeconomic conditions and the resultant downturn in trading volume and revenue. This situation is further complicated by the increasingly hostile regulatory environment in India.
Indian Authorities Take a Dim View of Crypto
Indian authorities have historically adopted an anti-crypto stance. Finance Minister Nirmala Sitharaman even voiced her support for an outright ban in 2022 due to the “destabilizing effect of cryptocurrencies on the monetary and fiscal stability of a country.”
Rather than implementing a ban, Indian authorities opted to introduce punitive tax measures that have had the effect of damping demand. Indians pay a 30% tax on the capital gains from trading, selling, or spending cryptocurrency. Additionally, a 1% tax deducted at source (TDS) fee is payable on the transfer of digital assets.
Opposing the tax policy at the time, WazirX CEO Nischal Shetty called on the Indian government to rethink its approach, citing a list of negative consequences that included users being put at risk due to circumventing taxes on non-KYC platforms.
In November 2022, The Reserve Bank of India (RBI) announced plans for its digital rupee central bank digital currency (CBDC) pilot. The accompanying press release revealed the RBI had opted for a wholesale CBDC model, enlisting a network of nine domestic banks. However, a retail version was piloted in the following month.
On the Flipside
- Crypto winters are a time for building and refocusing business strategy.
- Despite India’s anti-crypto stance, the country is still viewed as a major global tech and innovation center, according to E&Y.
Why This Matters
The back-to-back redundancies at CoinSwitch and CoinDCX indicate that the Indian crypto sector is grappling with severe headwinds beyond the global crypto winter.
Read more on CoinDCX’s decision to cull staff numbers here:
Learn more about the tenacity of Bitcoin holders during crypto winter here: