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Brain drain

WazirX’s Co-founders set sail for Dubai, more to follow?

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Indian cryptocurrency exchange WazirX’s co-founders, Nischal Shetty, and Siddharth Menon have reportedly moved to Dubai with their families, as per local sources. At present, the trading platform continues to operate from its headquarters in Mumbai.

A representative of the firm denied rumors of shifting its headquarters from India saying that all employees of the cryptocurrency exchange, are working remotely. Another co-founder and chief technology officer Sameer Mhatre continue to operate from India, the report said.

“We are a remote-first organization with employees in over 70 locations. This gives all the company employees the option to work from anywhere, subject to their comfort and convenience unless they are required to travel officially.

WazirX is headquartered in Mumbai and there is no change in any of our operating procedures. It is business as usual,” the WazirX spokesperson told CNBC-TV18.

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WazirX's Co-founders set sail for Dubai, more to follow? 2

Sources earlier hinted that Shetty and Menon would be stepping down from the active daily operations at WazirX to focus on new projects.

WazirX founders set sights on Web3

A few months ago, Shetty announced he was working on a sharded layer 1 blockchain project called ‘Shardeum with US-based crypto innovator Omar Sayed. At the same time, Menon said he too would be launching Tegro, a Web3 game ecosystem marketplace, with game development firm SuperGaming.

But one cannot ignore the fact that India’s stiff crypto tax and hostile banks in contrast to the crypto-friendly nations such as Dubai, Singapore, Mauritius, and the Cayman Islands have pivoted domestic crypto businesses to shift their base. With Dubai being the nearest one, many Indian-based entrepreneurs, developers, and engineers thus see it as a viable alternative.

In a previous report by TronWeekly, Shetty has warned earlier how India stands to lose homegrown talent and miss out on the Web3 revolution. He then urges the govt, to reconsider its stance on digital assets

Four years ago, crypto exchanges ZebPay and Vauld moved to Singapore. Other firms like Polygon too, shifted to Dubai, while Mudrex set up shop in the US in 2019. Shilpa Mankar Ahluwalia, Partner and Head-FinTech at Shardul Amarchand Mangaldas & Co told,

“The lack of clarity on what the crypto regulatory framework will look like is making investors rethink their decision to make India the base for launching crypto platforms and products.”

“India Will Lose Web3 If Crypto Entrepreneurs Leave”-WazirX Founder

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India’s finance ministry recently clarified that it won’t allow crypto investors to set off losses incurred from one cryptocurrency against the gains from another crypto asset. On top of that, 30% tax on capital gains and a 1 percent tax deducted at source [TDS] proved too much for many crypto bigwigs who are already ringing alarm bells.

One of them is Nischal Shetty, CEO of WazirX. Expressing his thoughts, the top exec tweeted that the Indian government needs to reconsider their stance on digital assets and warned that if crypto entrepreneurs leave, the nation would severely lose homegrown talent and stands to miss out on the Web3 revolution.

Four years back, ZebPay, once the nation’s dominant exchange moved to Singapore. Sandeep Nailwal, Polygon’s co-founder relocated to Dubai in 2020.,told Bloomberg, “The brain drain is absolutely crazy.”

Not only entrepreneurs, but many young blockchain developers are also flocking to friendlier nations. BuyUCoin CEO Shivam Thakral told recently in an interview that more than 30 engineers left to work in the US, Singapore, and Dubai.

Vivek Belgavi, a partner at PWC, said “Right now, many Indian crypto firms, developers, and founders are trying to move to Dubai owing to its proximity to India along with its transparent and friendly taxation regime.

Can India reverse this brain drain?

On March 24, the government proposed tightening the taxation norms by prohibiting the set-off of any losses with gains from other virtual digital assets or VDAs. However, the crypto tax legislation became a law on March 25, without accommodating some of the concerns raised by the community. Due to this, many in the industry feel that the exodus might further escalate in the near future.

Siddharth Sogani, founder and CEO of Blockchain analytics firm Crebaco, recently tweeted that India would see the biggest brain drain in history in the next 8-12 months. “Making crypto difficult is not going to stop innovation. The smarties will move offshore. And you know what, these smarties will make billion-dollar enterprises in the crypto space,” his tweet read.

Polygon’s Nailwal said he wanted to live in India and promote the Web3 ecosystem but noted, it would require a great deal of effort for India to get its talent back home despite being home to the largest base of crypto owners at 100 million.