The cryptocurrency exchange Huobi Global will begin layoffs, which might affect more than 30 per cent of the Company’s operational staff. The steep decline in income that followed the exclusion of all Chinese customers is the primary factor in this decision. A few months before the most recent crackdown in China, Huobi relocated its operations and exchange to another part of the world. This occurred before the latest crackdown. According to CoinDesk, the Company moved some of its activities to locations outside China. That happened after the Chinese government banned crypto exchange and related activities.
Huobi Global has already attempted to grow global businesses, and it maintained these attempts when China placed stricter regulations on cryptocurrency exchanges in September 2017. On the other hand, it formed a distinct legal entity in the city-state of Singapore. However, a section of the personnel and top management continued to operate in China until May of the previous year. Since then, several operational aspects, such as business development and marketing, have begun to relocate to international locations. It is believed that this occurred when the technical teams were still based in China, as stated by former workers.
It is also possible that the crypto exchange platform will set off the staff among India’s cryptocurrency exchanges. The current weak market, which resulted in tighter restrictions and increased compliance costs, is not particularly advantageous in India for the new tax rules, according to the opinions of several specialists.
According to Smit Khakhkhar, Tech Diligence at Delta Blockchain Fund, crypto has begun to face layoffs. As per Khakhkhar, the Indian cryptocurrency ecosystem may see significant staff reductions due to regulatory compliance-related losses in business and income.
According to the most recent budget proposal for the union, there will be a uniform tax of thirty per cent on all profits made using cryptocurrencies beginning on April 1 and a tax deduction of one per cent on all crypto transactions starting on July 1. Consequently, it might cause a significant drop in trading volumes across all cryptocurrency exchanges that comply with KYC regulations.
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The cryptocurrency research group CREBACO saw a decline of almost 70 per cent at the WazirX exchange and approximately 60 per cent at the CoinDCX platform. Furthermore, new compliance standards have been issued by the Ministry of Electronics and Information Technology. In addition, it demanded that all KYC information for consumers of Indian cryptocurrency exchanges be stored for five years.
Kashif Raza, an expert on the cryptocurrency market and the creator of Bitinning, said that the increased regulatory compliances have made operating the cryptocurrency exchange business less attractive.
Sharat Chandra, the vice president of Research and Strategy at EarthID, said that the instability in cryptocurrency markets caused all financing to be suspended. Despite this, it is essential to note that the Indian cryptocurrency exchanges are not the only ones that have attempted to reduce expenses in light of the recent economic crisis. There are several global cryptocurrency exchanges, some of which are Coinbase, Gemini, Crypto.com, and BitMex. It is being supplanted in the Middle East by cryptocurrency, poised to become the region’s financial oasis.
One of the reports claims that Huobi’s firm previously worked as a technology supplier for a cryptocurrency exchange. Because the corporation wanted to avoid being subject to yet another government investigation, its operations were based in a foreign country. The exchange resulted in a thirty per cent reduction in headcount and a reduction in the number of posts in the human resources department.