Major Indian crypto exchange CoinSwitch has laid off some members of its customer support team amid uncertain crypto regulation and stringent crypto taxation.
CoinSwitch, a crypto exchange backed by Andreessen Horowitz and Coinbase Ventures, has axed 44 employees from the company’s customer support team following a reduction in customer queries, according to local news outlet Moneycontrol.
A CoinSwitch spokesperson who spoke to Moneycontrol described the layoff as right-sizing, stating that the affected members voluntarily resigned after speaking with their managers.
“We right-sized our customer support team <…> This impacted the roles of 44 members of our customer support team, who voluntarily resigned from their roles after a detailed discussion with their managers earlier this month.”
The spokesperson said the company is ready to take the impacted employees back once volumes grow and new positions are available. Meanwhile, the startup employed 60 people since April before the August layoffs.
However, it seems the customer support team was not the only affected part of the company, with anonymous sources stating that CoinSwitch also laid off staff from the operations team. One of the affected people said that the company offered to pay the laid-off employees four months of severance pay.
The crypto exchange refuted claims about having a separate operations team, stating that the company operated a “flat organizational structure with minimal hierarchy.”
Surviving India’s tough crypto policies
The CoinSwitch layoff comes shortly after rival cryptocurrency exchange CoinDCX reduced its staff by 12% or 71 employees.
Crypto businesses in India are struggling to operate amid an uncertain regulatory environment and strict crypto tax burdens, with the latter causing a drastic reduction in the trading volumes of local exchanges.
In January, the Bharat Web3 Association, comprising some of India’s prominent exchanges, called on the government to reduce the tax deducted at source (TDS) from 1% to between 0.1% and 0.001%. According to the Association, more Indian investors are turning to foreign exchanges because of the unfavorable tax policy.
CoinSwitch, meanwhile, is reportedly looking to diversify beyond crypto to build a wealth tech platform, as revealed to Moneycontrol by the company’s co-founder and CEO Ashish Singhal in July. Singhal is supposedly discussing with regulators to launch seven financial products, including mutual funds, fixed deposits, exchange-traded funds (ETFs), and bonds, by the end of 2023.
In 2021, CoinSwitch became the second crypto startup after CoinDCX to attain unicorn status after raising $260 million in a Series C funding round co-led by Andreessen Horowitz and Coinbase Ventures, with participation from backers such as Tiger Global, Sequoia Capital, and Paradigm.