The delays and deferment of crypto regulations in India is turning out to be deadly for Indian cryptocurrency startups. We have already seen two exchanges shut down in last few months (namely Zebpay and Coindelta), and it seems that one more exchange may also do the same if some constructive crypto regulations are not put in place soon.
That’s right. Things are not going well at Unocoin, the cryptocurrency exchange which recently got into trouble for launching India’s first crypto-ATM. The ATM problems might have been gone with the seizure of its machine from Kemp Fort Mall, but same can’t be said about the other woes of the company. It’s turning out that an overwhelming majority of company’s workforce (as large as 86%) has left it, and the company is in no mood to hire their replacements.
Unocoin used to operate with a workforce of 100 employees. But at present, it’s operating with a workforce of only 14. And that is after the company asked many of its employees to leave last week. When news regarding this broke out in the community, my colleague Aheli reached out to Unocoin CEO Sathvik Vishwanathan for some more information. And here is some exclusive information that we found out:
Aheli: How long has it been going on?
Sathvik: We had the first set of employees who were mostly of customer care executives left in Jan. Then we had second round in last week. We also did not replace many when they were leaving on their own during past 1 year.
Aheli: Did some of them include tech people too?
Sathvik: Yes Few were tech. We had redundancy before, which we do not have now. That’s unfortunate.
Aheli: Does this mean, the regulatory uncertainty might force exchanges to shut down? Like Coindelta and Zebpay?
Sathvik: Depends on how long the uncertainty exists. For now, the exchanges are not self-sustaining in India, which means they are burining the fuel and figuring out.
Aheli: I read that the operation costs are too high.
Sathvik: Yeah that is true with any tech startup. If you have a team of 30 with half of them being good tech guys, you are burning easily 35-40 lakhs per month.
You can see how things don’t seem to be going well at Unocoin. Sathvik hasn’t ruled out the option of shutting down if constructive regulations don’t come soon. He has also admitted to the high operation costs and cash burn of crypto startups (or any startups) in India.
However, at the same time it also doesn’t mean that Unocoin is going belly-up anytime. According to Sathvik’s quotes published by ET, the company has got enough cash reserves to operate for a few months. So it’s not going anywhere in foreseeable future, and that’s why these cost reduction measures have been put into place. But if constructive regulations don’t come soon, anything is possible. And that is true not only for Unocoin but also for other companies in the space.