Crypto Startup WeTrade Shuts Operations

SUMMARY

With the crypto winter deepening and the ambience turning increasingly hostile, we have decided to pause our services: WeTrade

WeTrade disabled trading services from January 17, 2023 and also stopped accepting fresh deposits and new investments

Sources told Inc42 that WeTrade laid off all its employees and shut its operations last month

Bengaluru-based crypto platform WeTrade will be shutting its operations this month amid the funding winter and the uncertainty in the crypto market.

“WeTrade started in 2022 with a vision to make trading in cryptocurrency easy and rewarding. However, with the crypto winter deepening and the ambience turning increasingly hostile, we have decided to pause our services,” the startup announced in a LinkedIn post recently.

Trading services on the platform were disabled from January 17, 2023. The platform also asked customers to sell their coins and withdraw the amount from their wallet within a month. Meanwhile, it also stopped accepting fresh deposits and new investments.

“In the course of the next 30 days, our focus will be to ensure that our customers’ invested amounts are duly returned to their bank accounts,” it added.

Meanwhile, sources told Inc42 that WeTrade laid off all its employees and shut its operations last month. Its founder Prashant Kumar, a technology veteran who earlier headed the engineering division at Flipkart Wholesale, declined to comment.

However, the startup declined the claim of layoff. “As an organisation, our customers and shareholders are our top priority and this month, our team is dedicated to ensure that our valued customers get their money back. Decisions around their continuance will be taken later in consultation with board and key stakeholders. This has been one of the best teams to work with that has managed to achieve new records in a short period of time,” it said in a statement.

WeTrade, founded in 2022 by Kumar, charged zero trading fees and allowed customers to begin crypto investing with a minimum amount of INR 100.

In October 2022, the platform also launched ‘weTrade’ which offered users a fixed interest on their stable cryptocurrency investments. Users could earn up to 14% interest per year which was credited daily, TDS free and had no lock-in period.

WeTrade raised INR 15 Cr from external investors, including VCs and angel investors, last year, according to a FE report. At that time, the platform said it aimed to clock a turnover of INR 100 Cr by the end of FY23.

The latest development comes at a time when the funding winter and macroeconomic headwinds have hit the Indian startup ecosystem hard. Indian startups have laid off nearly 22,000 employees since last year to cut costs and extend their runway.

The situation of crypto startups is even worse as the crash in crypto prices and regulatory uncertainty have hit them hard. The Indian government’s decision to impose 30% tax on income from crypto transactions and 1% tax deducted at sources (TDS) for crypto transactions also affected trading volumes on Indian crypto platforms.

In addition, a number of charges around financial irregularities and violation of laws led to several investigations by the Enforcement Directorate (ED) against major crypto exchanges, which again impacted investor sentiment.

Last week, Economic Affairs Secretary Ajay Seth said that India is working with the Financial Stability Board (FSB) to reach a consensus on global regulations for cryptocurrencies during the country’s G20 presidency itself.