What Ails The Crypto Exchange?

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WazirX, an Indi­an cryp­to exchange, has laid off 40 per cent of its total employ­ees, con­firmed a for­mer employ­ee, while speak­ing to Out­look Mon­ey on the con­di­tion of anonymi­ty. As many as 50 to 70 of the 150 WazirX staff were let off.

WazirX said it had reduced staff to “weath­er the cryp­to win­ter” as it want­ed to remain sta­ble as a com­pa­ny in these try­ing times. “The cryp­to mar­ket has been in the grip of a bear mar­ket because of the cur­rent glob­al eco­nom­ic slow­down. The Indi­an cryp­to indus­try has had its unique prob­lems with respect to tax­es, reg­u­la­tions and bank­ing access. This has led to a dra­mat­ic fall in vol­umes in all Indi­an cryp­to exchanges,” WazirX said in a statement. 

The employ­ees who were laid offer were informed on Fri­day that they would be paid for 45 days and would not be required to report to work. Their access was with­drawn immediately.

Falling Volumes

Data pro­vid­ed by CREBACO, a cryp­to research firm, to Out­look Mon­ey revealed that the trad­ing vol­ume for WazirX fell 94.23 per cent from August to September. 

One of the for­mer employ­ees of WazirX told Out­look Mon­ey, “Looks like they are in con­sol­i­da­tion mode, vol­ume num­bers have come down to a his­toric low for WazirX, so they need to save costs.” 

CoinGecko, anoth­er data provider plat­form, record­ed that WazirX’s dai­ly trad­ing vol­ume is down from its peak of 478 mil­lion in Octo­ber 2021 to around 1.5 mil­lion as on Octo­ber 1, 2022.

ED Troubles

Cryp­tocur­ren­cy exchanged WazirX has been under pres­sure for some time because of Enforce­ment Direc­torate (ED) investigations.

But it announced on Sep­tem­ber 12, 2022, that ED has grant­ed it per­mis­sion to use its bank accounts. It said this devel­op­ment came about after it coop­er­at­ed with inves­ti­ga­tors and pro­vid­ed them with all the required details, infor­ma­tion, and doc­u­ments of the sus­pect­ed com­pa­nies that had used the WazirX platform. 

On August 5, 2022, the ED had frozen WazirX’s bank accounts con­tain­ing Rs 64 crore of the company’s mon­ey. It had also raid­ed its premis­es for alleged vio­la­tion of the FEMA Act. The ED offi­cials had also searched the premis­es of one of the direc­tors of Zan­mai Labs, which owns WazirX. 

Empty Nest?

The sec­ond for­mer employ­ee we spoke to, alleged that both the founders of WazirX, Nis­chal Shet­ty and Sid­dharth Menon are con­cen­trat­ing on their new projects. “The founders have poached some of the staff for their own new ven­tures,” alleged this person.

Shet­ty has report­ed­ly start­ed a Web 3.0 project named Shardeum, while Menon has launched a gam­ing project named Tegro. Both left India ear­li­er in 2022, and are now based out of Dubai.

Out­look Mon­ey tried to get in touch with Shet­ty and Menon but did­n’t receive any com­ments till the fil­ing of the report.

How­ev­er, the WazirX state­ment main­tained that the com­pa­ny was fac­ing trou­ble because the mar­ket was not in a good shape and would come out strong soon. “This sit­u­a­tion is sim­i­lar to the try­ing times the indus­try faced in 2018; at that time, we dou­bled down and built our inno­v­a­tive P2P engine. The cryp­to indus­try oper­ates in cycles and the bear mar­ket is inevitably fol­lowed by a spec­tac­u­lar bull mar­ket. We will con­tin­ue to focus on our cus­tomer needs and con­tin­ue to build. We are con­fi­dent that we will come out stronger when the bull mar­ket arrives,” read the WazirX statement.

Out­look Mon­ey tried to get in touch with Shet­ty and Menon on dif­fer­ent plat­forms but did­n’t receive any com­ments till the fil­ing of the report.

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