CoinDCX Lays Off 71 Employees, Blames India’s Crypto Tax Impact on Business in Bear Market

CoinDCX says it is now determined to focus on keeping its finances as well as operations afloat, amid the ongoing slump in the crypto market.

Written by Radhika Parashar, Edited by Manas Mitul | Updated: 22 August 2023 19:22 IST

CoinDCX Lays Off 71 Employees, Blames India’s Crypto Tax Impact on Business in Bear Market

Photo Credit: Facebook/ CoinDCX

India’s crypto tax rules went live last year including one percent TDS cut on all transactions

Highlights

CoinDCX was founded in 2018 and is among India’s biggest exchanges
The firm aims to restructure itself with retained employees
CoinDCX wishes to onboard 50 million people on crypto wagon by 2025

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.

China Proposes Digital IDs, Punishments for Metaverse Users: Report

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).

Crypto Exchanges in the SEC's Crosshairs: Safeguarding Investor Interest

“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.

Is the Samsung Galaxy Z Flip 5 the best foldable phone you can buy in India right now? We discuss the company's new clamshell-style foldable handset on the latest episode of Orbital, the Gadgets 360 podcast. Orbital is available on Spotify, Gaana, JioSaavn, Google Podcasts, Apple Podcasts, Amazon Music and wherever you get your podcasts.

Affiliate links may be automatically generated - see our ethics statement for details.

Comments

For the latest tech news and reviews, follow Gadgets 360 on X, Facebook, WhatsApp, Threads and Google News. For the latest videos on gadgets and tech, subscribe to our YouTube channel. If you want to know everything about top influencers, follow our in-house Who'sThat360 on Instagram and YouTube.

Further reading: Cryptocurrency, CoinDCX, Crypto Tax India

Radhika Parashar

Email Radhika

Radhika Parashar is a senior correspondent for Gadgets 360. She has been reporting on tech and telecom for the last three years now and will be focussing on writing about all things crypto. Besides this, she is a major sitcom nerd and often replies in Chandler Bing and Michael Scott references. For tips or queries you could reach out to her at RadhikaP@ndtv.com. More