The exchange has recently faced regulatory scrutiny from authorities.
WazirX, one of the major Indian crypto exchanges, on Saturday cut its workforce by 40% following the prolonged crypto downturn.
This move follows similar ones made by various crypto companies like Gemini, Coinbase, BlockFi, Crypto.com, Bitso, and even the NFT marketplace OpenSea due to the bear market.
The Indian crypto exchange twitted an update on ED investigation: “the ED has unfrozen the bank accounts of WazirX. In cooperation with investigators, WazirX provided all necessary details & documents of the alleged accused companies that used the WazirX platform.”
Why WazirX is Reducing its Workforce
WazirX has attributed his decision to the current bear market. According to the firm, Indian crypto regulatory issues such as taxes, regulations, and banking access have contributed to a decline in crypto trading volumes on Indian exchanges.
WazirX stated that the downsizing will help it weather the crypto winter and also maintain stability.
The reports revealed that workers in positions such as Managers, Analysts, Associate Managers, and Team Leaders from departments such as Human Resources, Customer Service, Public Policy, and Communication were affected.
According to a report by CoinDesk, the crypto exchange laid off around 50-70 employees of its total workforce of 150. The employees let go were told by the company on Friday (September 30) that they would receive severance pay for 45 days.
WazirX also told the employees that they would not be required to report to work, and their accesses were withdrawn.
When reached out, the crypto exchange confirmed the development. A WazirX spokesperson told Inc42, “Our priority is to be financially stable and to continue serving our customers. To achieve this, we’ve had to reduce our staff to weather the crypto winter.”
Indian Authorities and Assets of WazirX
The downsizing of WazirX’s workforce also comes at a time when the exchange is battling Indian authorities over the freezing of its assets.
India’s Enforcement Directorate (ED) froze around $8 million of exchange assets in August over money laundering allegations.
According to ED, WazirX and some other exchanges in the country processed the transfer of Rs 2,790 crore (over $350 million) to wallets under investigation. ED further accused the exchange of not doing due diligence which included KYC and even making a Suspicious Transaction report.
The funds were later released in September. However, in announcing the asset unfreeze, WazirX said that they have been cooperating with authorities during the investigation. They added that the funds were unfrozen as no suspicious activity was found.
It is worth remembering that, prior to the recent activity, the exchange was under ED investigation in 2021 for money laundering charges related to illegal online gambling proceeds tied to Chinese entities.
This time around, the supervision of crypto exchanges in India did not stop with WazirX. On Aug. 12, the ED froze a total of $46.4 million in Yellow Tune’s bank balances and balances from crypto exchange Flipvolt. The allegations were also money laundering related, and the company was accused of being a shell for Chinese entities.
By Audy Castaneda
