CoinDCX lays off 12 per cent of staff

Indian cryptocurrency exchange CoinDCX has laid off 71 employees, amounting to around 12 per cent of its staff.

In a note to employees yesterday, CoinDCX founders Neeraj Khandelwal and Sumit Gupta attributed the layoffs to the prolonged crypto bear market and the impact of a recently implemented tax scheme in India.

“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”, the blog post said.

“These factors had a significant impact on our volumes and thus revenues. To adapt, we undertook several proactive measures, including direct cost optimisation and investment in automation to drive efficiency and productivity. We also reprioritised certain initiatives or products in line with our long-term business strategy”

Staff that have been affected will be provided with support, including severance pay, an additional month’s salary, and other benefits.

This layoff comes a year after CoinDCX topped US$2 billion in valuation after raising US$135 million in a series D funding round last April, led by Pantera and Steadview, making it the most valuable crypto company in India at the time. The company also became India’s first crypto unicorn in 2021.

Since then, the company has faced significant challenges.

The Indian government levied a 30 per cent flat income tax on cryptocurrencies in July last year, which has kept investors from investing in the sector and leaving many crypto companies in India struggling to extend their cashflow runways. There is also a 1 per cent tax deducted at source on all transactions since February.

Some crypto exchanges have reported trading volumes drop as much as 70 per cent.

These policies have also drawn criticism from cryptocurrency industry leaders, including Binance founder and CEO CZ, who claimed that these tax policies would probably “kill the industry” in India.

Two other Indian crypto startups have also shut down in the past few months.

Despite this, CoinDCX had claimed that they had a runway of around 4 years as recently as May this year. The company had also undergone a restructuring in January, though no layoffs were announced at that point.