CoinSwitch Completes First ESOP Buyback; Valuation At $1.9 Billion

Cryptocurrency trading and investment company, CoinSwitch, has announced that it has successfully completed its first Employee Stock Option Program (ESOP) buyback worth Rs 19 crore ($2.5 million). The company said in a press release that this milestone was achieved within just 20 months of operating in India.

"The equity buyback programme is a small effort to acknowledge our employees’ contributions to the phenomenal growth of CoinSwitch. Over 15 million users trust CoinSwitch in their investment journey, making us the largest crypto app. We met and exceeded our targets in India because of the amazing team, and we shall continue to launch similar liquidity events as part of our commitment to creating wealth for all, "said Ashish Singhal, Co-founder and CEO, CoinSwitch.

Most Recent Funding Round

CoinSwitch said it had raised $260 million in Series C funding from Coinbase Ventures and Andreessen Horowitz (a16z). This funding round was concluded in September 2021 and was raised at a valuation of $1.9 billion.

CoinSwitch did not share any key details about what it intends to do with these funds, but has hinted that it will provide investors on their platform an option to invest in other asset classes and financial products. With this launch, Coinswitch hopes to become a full-fledged wealth tech platform for crypto and other financial investments.

Offsetting Crypto Losses

Singhal also clarified on offsetting crypto losses, adding that it would "be detrimental to India’s crypto industry and the millions who have invested in this emerging asset class."

"We fear the lack of provision to offset losses will drive users away from KYC-compliant exchanges and platforms to the underground peer-to-peer grey market, which would defeat the purpose of the tax," he said.

He added that since the Union Budget had recognised virtual digital assets (VDAs) as an emerging asset class, therefore, a natural course of action would have been to progressively bring the regulations on par with other asset classes.

Instead, today, with this clarification, we have taken a step backwards. If a regressive provision such as this had been applicable in equities, it would have discouraged retail investors from participating, "he said.

What is an ESOP?

An ESOP is an excellent corporate benefit that companies use to reward their hard-working and top-quality employees. An employee stock option is defined in Section 2(37) of the Companies Act, 2013 as the option granted to the directors, employees, or officers of the company or its holding or subsidiary company to purchase, benefit, or subscribe to the company's shares at a predetermined price on a future date.

CoinSwitch started operations with just 20 employees and now has 500 employees on its rolls. It is also building India’s first Web 3.0 teams. Also, the user base of CoinSwitch has grown 15 times, from 1 million in January 2021 to 15 million by January 2022. This makes CoinSwitch the largest crypto trading and investment app in India by number of users.