The storm of layoffs that has swept through the crypto industry has now descended upon CoinDCX, the renowned Indian crypto exchange.
This week, the company announced a significant reduction in its workforce, shedding 12% of its employees. What’s driving this drastic measure? A combination of challenging tax regulations and an unforgiving bear market, according to the exchange’s top brass.
Policies and Profits: India’s Tax Turbulence
CoinDCX’s founders, Sumit Gupta and Neeraj Khandelwal, didn’t beat around the bush about the reasons for these job cuts. India’s formidable crypto taxation rules introduced in 2022 are certainly a thorn in their side.
Investors now must part with a 1% tax right at the source, and then another 30% from any profit they make off their crypto investments. To say this has thrown cold water on the industry would be an understatement.
After this legislation came into play, several exchanges, including CoinDCX, watched in disbelief as their trading volumes plummeted, in some cases by as much as 70%.
Not surprisingly, the ripples of this regulation have affected CoinDCX’s bottom line. Revenue streams have taken a hit, forcing the exchange into cost-cutting mode, optimizing where possible, and investing in automation to try to salvage their operations.
Fast forward to early 2023, and any hopes that the tide might turn during the national budget discussions were dashed. The taxing 30% profit levy and the 1% TDS remained unchanged. To add salt to the wound, not paying up the TDS could now see offenders behind bars for up to seven years.
Layoff Trend: Not Just CoinDCX’s Dilemma
While CoinDCX’s woes are significant, they’re not the only ones fighting to stay afloat in these stormy waters. Major players in the crypto exchange market, both in India and abroad, are reeling.
Coinbase, for example, started 2023 on the back foot, letting go of a staggering 950 employees in a desperate attempt to reduce costs. Binance, another titan in the field, has also been offloading staff throughout the year.
Even though they’ve acknowledged the layoffs, the exact number of employees shown the door remains undisclosed. Binance.US didn’t fare much better, having to cut its workforce after a lawsuit from the US Securities and Exchange Commission.
On a brighter note – and yes, there are still glimmers of hope in the crypto world – the sector continues to attract talent. Take Guillaume Poncin, for instance, once the head honcho of Web3 and crypto at Stripe.
He has recently taken up the mantle of head of engineering at Alchemy, a web3 development platform. Poncin seems to be optimistic, believing he can influence and boost crypto adoption through Alchemy.
He recognizes the current challenges in the Web3 domain but remains confident that things will improve. It’s clear that the crypto realm is undergoing a transformation.
Exchanges, once thought to be unshakeable pillars of the industry, are now showing cracks. And while players like CoinDCX grapple with policies and market conditions, others like Alchemy are forging ahead, aiming to innovate.
What’s next for CoinDCX remains to be seen, but one thing’s for sure: In this volatile and unpredictable world of crypto, it’s adapt or perish.
