London-based early-stage digital assets firm Koinly has decided to reduce its headcount by up to 14%.
Based on the figure recorded on the LinkedIn page of the crypto tax startup, Koinly has 93 listed employees. According to the Chief Executive Officer (CEO) of Koinly Robin Singh, the decision was made based on the current crypto winter which has been made more unbearable by the implosion of the FTX Derivatives Exchange.
“We are taking measures to ensure we’re as lean as possible as we make our way through the crypto winter,” CEO Robin Singh said. “While change is an unavoidable part of business, it’s been a sad week at Koinly as we have had to let go of several of our colleagues.”
In this year alone, the crypto startup firm has recorded up to 225% expansion in relation to its headcount when it saw massive growth. However, the current market condition which has presented more losses than gains to crypto investors has put Koinly at a point where it has to downsize its workforce.
The FTX implosion caused blockchain firms like Solana-based Non-fungible token (NFT) protocol Metaplex to undergo a similar situation to that of Koinly. The CEO of Metaplex Studio Stephen Hess announced that the firm was going through a massive cut in headcount which he said was FTX-induced.
Crypto Investors Tries to Evade Tax
Singh also mentioned the fact that many crypto investors have refused to report their crypto holdings during this time on their tax returns. He believes that such investors may be at a disadvantage shortly.
Expressly stating, he said “As a crypto tax company, what’s hurting us more than the actual crypto downturn is the lack of awareness crypto investors have around filing their crypto losses.
We are seeing fewer people reporting crypto on their tax returns, mostly because there are a lot of losses this year. However, investors are generally unaware that filing losses on their tax returns benefit them in the long run, as losses can be used to offset gains in future years.”
In the past, many crypto investors have been known to intentionally hide their crypto holdings to avoid paying taxes on them in certain jurisdictions. With the recent situation in the crypto industry, these same investors may see more reasons why their holdings should not be declared.