In a surprising move, Taxbit, a software company that supports cryptocurrency holders with tax compliance, announced a significant reduction of its workforce. About 80 people, or 40% of the company’s total staff, have been laid off, adding to the 15% of workers released last year. This decision comes as the company plans to re-expand in the UK and EU, and on the same day when its co-founder and CEO, Austin Woodward, stepped down from his role. Lindsey Argalas, a former Intuit executive, will replace him at the helm, making her one of the few female CEOs of a major crypto firm.
Argalas believes Taxbit’s primary role is to solve complex tax and accounting needs, which is becoming increasingly essential in the crypto industry as tax laws evolve and the regulatory environment gets more stringent. For example, last month, President Joe Biden voiced support for cutting “tax loopholes that help wealthy crypto investors,” and the White House urged Congress to implement a 30% tax on Bitcoin miners across the country – although that idea appears to have been abandoned amid debt ceiling negotiations.
Taxbit’s clients include major firms like PayPal, Google, Block, Fidelity, and Ralph Lauren, some of which hold crypto on their balance sheets on behalf of customers buying digital assets on the platform. In August 2021, Taxbit raised $130 million in Series B funding, giving it a valuation of $1.3 billion at the time. It was the only newcomer in this year’s Forbes Fintech 50.
However, Taxbit is not alone in facing challenges. The crypto industry as a whole has seen declining digital asset prices and increased regulatory pressure over the past year, forcing several companies to reduce their workforces. For instance, Coinbase, America’s largest cryptocurrency exchange, announced three rounds of layoffs since June 2022, with the most recent affecting 950 employees. It now faces a lawsuit from the Securities and Exchange Commission (SEC) for multiple violations of the nation’s securities laws.
Like Taxbit, Coinbase is also considering relocating its headquarters to the UK to bypass regulatory hurdles in the United States. Meanwhile, Kraken, another exchange, has faced similar challenges, announcing layoffs of 1,100 employees and receiving a $30 million fine from the SEC in February.
In conclusion, the constantly shifting regulatory landscape and the ongoing focus on taxation create both opportunities and challenges for companies like Taxbit. While the decision to reduce their workforce and change leadership may seem drastic, the company’s goal of expanding to the UK and EU could offer a more favorable environment for growth. However, it’s undeniable that the crypto industry still faces a long road ahead, with companies and investors alike facing uncertainty and increasing pressure from regulators.
Source: Cryptonews
