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Sumit Gupta’s tryst with cryptocurrencies started in 2017 as a dealer. This was the time when bitcoin, the preferred cryptocurrency, had its first run up with its worth rising practically 18-fold in a yr and subsequently, investor’s frenzy round cryptocurrencies peaked.
When Gupta operated throughout a number of exchanges globally to commerce within the digital tokens, he was confronted with many urgent points ailing the ecosystem: lack of liquidity out there, huge unfold and gradual order execution.
This prompted Gupta to reconnect together with his buddy from IIT-Bombay, Neeraj Khandelwal, who was additionally actively buying and selling in cryptocurrencies at the moment, to brainstorm on a product that would bridge these key market gaps for cryptocurrency merchants and buyers in India.
This led to the genesis of CoinDCX in March 2018.
“Via CoinDCX, we wished to supply its merchants a chance to commerce inexhaustible and with out restrict with a strong order ebook,” says co-founder and CEO Gupta. “We introduced highest liquidity into the Indian market by introducing the world’s high cryptocurrency exchanges like Binance, Huobi World and HitBTC within the nation.”
Earlier than establishing CoinDCX, Gupta had additionally co-founded ListUp, an auction-based worth discovery platform for second-hand electronics.
Journey thus far
CoinDCX began as a lite cryptocurrency change to handle the core challenge of lack of liquidity out there. “We began off as a crypto-to-crypto (C2C) change, providing a market the place patrons and sellers may come collectively to change cryptocurrencies,” says Gupta.
The corporate succeeded in resolving the difficulty of liquidity to a big extent by bringing high world exchanges underneath one fold in India.
Taking a step ahead, the corporate additionally launched fiat-to-cryptocurrency function referred to as Insta in the identical yr, which helped customers to purchase cryptocurrency in fiat. Over time, the corporate has consistently innovated and constructed a various suite of crypto-based monetary services and products.
To call a number of, customers can lend their crypto belongings and earn as much as 12 per cent curiosity by means of the platform’s Lend function. One other function referred to as Stake lets customers earn passive revenue by holding their cryptocurrency and margin gives customers six occasions leverage trades on over 250 cash.
“Whereas designing our merchandise, we have in mind the varied forms of merchants working in our area, their buying and selling experiences, their potential for danger tolerance and the frequency of their buying and selling,” says Gupta.
In underneath three years, CoinDCX claims to be India’s largest cryptocurrency change by way of quantity, liquidity and by bringing all crypto-trading merchandise underneath a single roof. The corporate claims to course of every day buying and selling quantity of about $15 million and has a person base of over 200,000 buyers and merchants.
Constructing an organization amidst hostile laws
The Reserve Financial institution of India (RBI) and the federal government have been skeptical concerning the digital tokens because the starting. In an excessive transfer, in April 2018 the central financial institution had barred all banks and monetary establishments regulated underneath it from dealing in transactions associated to cryptocurrencies.
It was a turbulent time for CoinDCX because the directive got here only one month after the corporate began operations. “It was doubly laborious for us and different exchanges that had been working for some time as we needed to both scale down their operations or needed to choose for an entire shutdown,” says Gupta.
Furthermore, because the ban attributed a unfavorable connotation to the business, not solely did small buyers shied away from investing within the digital token, it grew to become tough to even get the buyers to commit within the absence of a transparent regulation. “Whereas most buyers realized India’s potential owing to its excessive cell penetration fee and extremely gifted tech workforce, buyers didn’t wish to transfer into a rustic the place there was an outright ban,” remembers Gupta.
However, the corporate held floor and continued constructing CoinDCX to make sure that their customers and stakeholders noticed the worth in what they had been doing and wished to realize, provides Gupta.
In reality, one yr after the corporate launched its operations, CoinDCX raised seed funding from Sanjay Mehta (founder and companion at 100x.VC) and Utsav Somani (companion at AngelList India) and worldwide investor Bain Capital Ventures.
In March 2020, the Supreme Court docket struck down RBI’s order, which was a serious turnaround level for CoinDCX. “The choice supplied a morale enhance to the cryptocurrency neighborhood in India and resulted in lots of optimistic developments within the nation’s cryptocurrency ecosystem,” says Gupta.
In the course of the COVID-19 induced lockdown, the corporate claims to have grown exponentially. Within the April-June quarter, the change clocked thrice progress within the total quantity traded and 4 occasions quarter-over-quarter progress in every day lively customers. Total, in Q2 and Q3, CoinDCX noticed 12 per cent enhance in signups and 20 per cent enhance in quantity. Additional, it recorded 21 per cent month on month (m-o-m) progress in commerce quantity and 25 per cent m-o-m progress within the variety of customers, in October when the present rally in bitcoin worth took off.
The corporate has additionally raised a complete of $19.4 million in exterior funding throughout three rounds in 2020. “We now have additionally tripled our workforce from 30 in March to 90 in December,” says Gupta, detailing the corporate’s progress within the pandemic yr.
On being requested how tough it has been to construct a enterprise in an area with hostile laws, Gupta says working a crypto-related enterprise is a problem not solely in India however globally. “I feel regulatory insurance policies, lack of understanding and readability about taxation-related points are the largest challenges for anybody working on this area anyplace on the planet.”