Crypto Tax Startup Koinly Cuts Staffers Just in Time for Tax Season
The layoffs were preceded by a surprise Slack message from Koinly’s chief executive
wan wei/Shutterstock.com
A crypto tax startup is laying off staffers and planning to shutter at least one key hub — just in time for tax season.
Koinly recently cut 16 full-time employees, or 14% of the company, representatives said Tuesday. Former insiders pegged the figure significantly higher, counting laid-off contractors who played integral roles.
Leading up to the curiously-timed move: a recent Slack from CEO Robin Singh announcing a restructuring, including the pending closure of the London office.
The early-morning, wide-ranging culling — for the North America-based team — came as a surprise even to other Koinly executives, according to three sources familiar with the matter. One source described the maneuver as a “sudden and unilateral” undertaking by Singh.
Employees were told to ask their line manager for clarity as to how the Koinly “flattening” would affect them. But their managers, sources said, appeared just as surprised by the move as they were.
“A lot of people were left wondering as to how this affected them,” one source said.
In a statement, a spokesperson for Koinly said the closure of the London office was not related to the layoffs — attributing it, instead, to an internal poll that found that United Kingdom employees preferred working from home.
“Koinly is a remote-first company,” the spokesperson said.
Two of the sources pushed back against that characterization, saying staffers enjoyed being in the office.
Irrespective of the office closure, which the spokesperson said is scheduled for April 2023, the company’s direction has spurred much internal puzzlement. More specifically, current and former staffers said they don’t understand why this is happening now. The coming months, after all, should be some of the most lucrative of the year for a crypto tax specialist, considering the mammoth capital losses scores of traders are sure to book.
“No one actually knows why Koinly had a need to let people go,” a source said.
In a statement, Singh said crypto investors have a “lack of awareness” when it comes to “filing their crypto losses.” The “actual crypto downturn,” according to Singh, has hurt the company by a smaller margin.
“We are seeing fewer people reporting crypto on their tax returns, mostly because there are a lot of losses this year,” Singh said. “However investors are generally unaware that filing losses on their tax returns benefits them in the long run, as losses can be used to offset gains in future years.”
Koinly representatives repeatedly deferred Blockworks’ multiple requests for comment ahead of a press release announcing the layoffs. Singh did not return a direct request for comment.
Sources, who were granted anonymity to discuss sensitive business dealings, said the way the restructuring has been communicated is in line with how the company generally operates.
Former employees said they have yet to receive their final paycheck — adding they have no idea when that might happen.
“It is hard to know how many people have been let go over the past week/months as there has never been any communication either before or after,” one source said. “You only find out that someone has been fired when you go to message them and their [Slack] is no longer active or if someone else tells you.”
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