The cryptocurrency market downturn is taking its toll even on the giants in the sector. Two of India’s leading crypto exchanges, CoinSwitch and CoinDCX, have started cutting down their teams, with CoinSwitch letting go of 44 employees and CoinDCX reducing its workforce by about 12%. This comes as a direct result of the cryptocurrency winter, where the market has been struggling, leading to a decrease in customer queries and impacting overall business performance.
CoinSwitch has confirmed that the reduction in its workforce was a strategic move to align with the present volume of customer queries, as the bear market has inevitably led to fewer inquiries. However, it’s worth noting that even though the move was framed as a necessary adjustment, losing nearly 8% of staff does pose a significant reduction in human resources.
This restructuring move follows closely that of another dominant player within the Indian crypto market realm, CoinDCX. With a similar reduction in staff, CoinDCX has cited market challenges, specifically the impact of the 1% tax deducted at source (TDS), as a critically contributory factor to their decision. The founders of CoinDCX, in their announcement, acknowledged the significant impact of these factors on their overall revenue and have taken active measures, including investment in automation, to drive efficiency and productivity.
This new tax reform, which targets local crypto exchanges, also played a key role in triggering a significant loss in crypto trading activity across the country. Moreover, India introduced a 30% tax on crypto gains in 2022, which led to an exodus of cryptocurrency service providers, considerably shrinking the crypto trading landscape.
While these reduced workforce measures may seem drastic, they highlight the exchanges’ efforts to mitigate their operational costs in the face of regulatory and market challenges, maintain their competitiveness, and ultimately provide optimized value to their customers. However, in the larger context of India’s financial ecosystem, the job losses and the stifling tax environment represent substantial obstacles for the country’s burgeoning crypto industry.
In conclusion, while companies like CoinSwitch and CoinDCX are confronting the storm in their ways, their decisions reflect a broader concern within the Indian cryptocurrency market. As industry players are called to dance with the waves of a bear market and challenging regulatory landscape, one question remains: What will be the future of India’s cryptocurrency exchanges amid such pressing times? This remains to be seen.