Indian Bitcoin exchange Unocoin was reportedly forced to let go of half of its staff, this came after talks to raise a new round of funds have failed to conjure up new money for the struggling bitcoin startup. This according to a report by The Economic Times, April 16, 2019.
A Tough Regulatory Environment
Reportedly, Bengaluru-based Unocoin now only has 14 staffers left after it had to let go half of its office, which came in light of recently failed talks to secure a new round of funding. This figure stands in stark contrast to the 100 employees the Bitcoin exchange boasted only a little over a year ago in February 2018.
Unocoin was launched in 2013 by Sathvik Viswanath, Harish BV, Abhinand Kaseti, and Sunny Ray, and managed to become one of the go-to Bitcoin exchanges for rupee-to-Bitcoin transactions during the bitcoin bull market from September 2016 to December 2017.
However, in light of the difficult regulatory environment in India, which oscillates somewhere between “Bitcoin is banned” to “we will regulate bitcoin soon”, a number of bitcoin startups have been forced to close their doors or leave to other jurisdictions.
The case of indirect bitcoin ban by the Reserve Bank of India is set to be heard at the Supreme Court in July. Until then, Unocoin still possesses sufficient funds to continue operations.
Unocoin CEO, Sathvik Vishwanath told The Economic Times:
“We did ask people to leave last week, but our operations will continue for the foreseeable future. We have some amount of reserves to push through for the next couple of months and will wait for the Supreme Court’s verdict.”
Should the supreme court not force the RBI to allow exchanges to operate bank accounts with local banks, Unocoin will likely go the same way as several of its peers.
As BTCManager reported on April 1, local bitcoin exchange Coindelta ceased its operations after the Reserve Bank of India’s ban on exchanges maintaining bank accounts with Indian commercial banks made it impossible for the exchange to continue business as usual.
Zebpay, one of the other “big three” Indian bitcoin exchanges that saw substantial user growth during the bitcoin bull market, was also forced to close down in 2018. The exchange’s operators then made the decision to relocate to the “blockchain island” Malta to set up a new operation there. However, its services will not be offered to Indian customers going forward.
Is the Future of Bitcoin Trading in India Peer-to-Peer?
Unless the Indian central bank reverses its ban on local bitcoin exchanges banking with Indian banks, it will be difficult for centralized exchanges to provide an INR-to-Crypto onramp for retail investors.
Unsurprisingly, therefore, peer-to-peer trading volumes for bitcoin have picked up on platforms such as LocalBitcoins and Paxful as P2P trading is slowly becoming the only real option to buy and sell bitcoin against rupee in India.