Coinbase Ventures-backed crypto exchange, CoinDCX, has undertaken a second round of layoffs, affecting 12% of its workforce. This decision comes as the company faces challenges posed by the extended bear market conditions and the impact of Tax Deducted at Source (TDS) regulations on domestic exchanges.
Over 86 Employees Impacted in Latest Round of Layoffs
With a total employee count of over 722 according to LinkedIn data, CoinDCX’s recent layoffs have affected more than 86 employees. This reduction is a response to the challenging market circumstances that have affected the startup’s overall revenue.
CoinDCX Regulatory Factors Contribute to Revenue Dip and Layoffs
Cofounders Sumit Gupta and Neeraj Khandelwal explained in a blogpost that the prolonged bear market and the impact of TDS regulations on digital assets transactions have resulted in decreased revenue. They emphasized the need for a more efficient team structure to ensure the company’s health and sustainable growth.
TDS Regulations and Its Impact on Crypto Exchanges
The Indian government introduced a 1% TDS for virtual digital assets transactions, including cryptocurrencies, and a 30% tax on income from such transactions. This regulatory change significantly affected the country’s crypto space, causing a decrease of approximately 60-70% in users on crypto exchanges.
CoinDCX Journey, Challenges, and Industry Landscape
Founded in 2018, CoinDCX became India’s first crypto unicorn in 2021 after raising substantial funds. However, regulatory guidelines and market uncertainties have posed challenges for the company and other startups in the crypto space. The recent layoffs mark the latest development in a series of events that have impacted the crypto industry in India, contributing to the broader trend of layoffs in Indian startups due to macroeconomic factors.
