crypto strategy

WazirX lays off 40% of its staff to weather the crypto winter

What is Loan Application Fraud?

Various fintech companies backed by Chinese funds could not get an NBFC license from the RBI to do lending business in India, so they devised the MOU route with former NBFCs to piggyback on their license and started disbursing loans through mobile apps. These Chinese fintech entities employ callers who misuse personal data and use abusive language to extort high interest rates from loan takers.

After the criminal investigation began, many Chinese apps shut down and diverted huge profits made through extortion tactics out of India. While investigating the fund trails, the ED discovered that a large number of funds had been diverted by fintech companies to buy crypto assets and then launder them offshore. Most of these funds, the ED says, were diverted through the WazirX exchange and then diverted to unknown foreign wallets. The company later said that it had no idea what the purpose of such transactions was on its platform and that the platform, like any other platform, could have been “abused”. The company said it was not associated with any of the allegedly accused fintech and instant loan app entities, which appear to be the subject of the ED investigation.

What is Crypto Winter?

If we see the value of every major crypto in the first half of 2022, it has consistently fallen. A handful of crypto-related businesses are facing serious financial difficulties, including bankruptcy. This period of market cooling is known as “crypto winter”. Like other asset classes, the crypto market has also seen a huge sell-off this year. From a market valuation of $2.7 trillion on November 7, 2021, the m-cap of the top 100 cryptocurrencies on July 24, 2022 has been reduced to $1 trillion, a decline of 62%.

“Winters in the crypto market can be depressing, but keep in mind that bull markets also follow bear markets. Stock prices have been steadily rising throughout history, as Cryptos can be quite volatile, but this sector has always bounced back and done exceptionally well,” WazirX said.

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