Indian crypto exchange CoinDCX announced the layoff of 12 percent of its workforce on Tuesday. A total of 71 employees were affected by the decision. The crypto exchange said in its official statement that India’s TDS (Tax Deducted at Source) deductions on every crypto transaction have slowed its business, especially during the ongoing bear market. CoinDCX said that India’s crypto transaction tax policy is having a lasting impact on domestic exchanges.
“Today we are making the difficult decision to reduce the size of our team by approximately 12 percent,” CoinDCX said in its statement. “As you all know, startups and corporates worldwide are going through tough times due to the tough macroeconomic conditions, especially in the crypto space due to the ongoing bear market and the impact of TDS on domestic exchanges. These factors had a significant impact on our volumes and therefore our revenue.”
India’s Ministry of Finance has enforced a one percent TDS on every crypto transaction over the past year, including buying and selling crypto and transferring crypto to a digital wallet. This rule aims to keep a trail of crypto transactions that are largely unregulated and anonymous in nature.
As India is still in the process of drafting rules to oversee the crypto sector, Finance Minister Nirmala Sitharaman felt it was necessary to introduce this rule to prevent cryptocurrencies from being misused for illicit transactions such as money laundering or terrorist financing.
Despite outcry from members of the crypto community to revise this TDS rule and lower the 30 percent tax on crypto income, the Indian government has remained steadfast in its policy making.
Faced with market pressures, CoinDCX is now determined to focus on maintaining both its finances and operations amid the ongoing crypto market slump. Bitcoin is currently trading at its two-month low of US$26,000 (roughly Rs.21 lakh rupees) on a backdrop of consecutive US interest rate hikes and other macroeconomic factors.
“We remain optimistic about the opportunity in India and are committed to our mission to increase crypto and Web3 adoption to 50 million people by 2025. We also want to assure you that no further team cuts are planned,” the company noted in its statement.
The exchange said it will provide affected employees with a severance payment equal to the full notice period, an additional monthly salary and other benefits, and access to advisory support.
Gadgets 360 also reached out to CoinDCX with a series of questions regarding the layoffs. The story will be updated with the company’s response.
Meanwhile, members of the Indian crypto fraternity offer words of encouragement to employees impacted by CoinDCX’s decision.
To everyone affected by the layoffs at CoinDCX: stay cheerful :raised_hands:
A mix of market volatility, regulatory challenges and global stagnation are driving forces.
But without a doubt, the Indian government’s draconian stance on crypto is a key factor leading to layoffs and…
— Kunal Gandhi (@kunalvg) August 22, 2023
Sad to hear about the layoffs at Coindcx. I hope those affected get back on their feet soon. I wish the team a lot of strength in these challenging times.
— Crypto Empire | AMA + Rooms (@Empire8x) August 22, 2023
CoinDCX is headquartered in Mumbai, Maharashtra and was co-founded in 2018 by Sumit Gupta and Neeraj Khandelwal.
In April last year, CoinDCX’s valuation reached US$2.15 billion (about Rs.17,829 crore) after the company raised US$135 million (about Rs.1,119 crore) in Series D funding from companies like Pantera , Coinbase Ventures, Kingsway, DraperDragon, Republic Capital and other related ventures.