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- 📉 The crypto party ended
Hey Founders,
Welcome to The Runway Ventures — a weekly newsletter where I deep dive into failed startup stories to help you become the top 1% founder by learning from their mistakes with actionable insights.
Today’s story is about how a crypto trading startup in India collapsed due to “external' factors. Let’s get to it! 🚀
Today at a Glance:
☠️ 1 Failed Startup → WeTrade
⚠️ 2 Mistakes → Lack of contingency planning for market downturns
🧠 3 Lessons Learned → Always be paranoid and plan for the worst
🔗 The Runway Insights → The new way to build software
💰 Southeast Asia Funding Radar → Fore Coffee raises $21M in oversubscribed IPO by over 200x
☠️ 1 Failed Startup: WeTrade
🚀 The Rise of WeTrade
🇮🇳 Founded by Prashant Kumar (a technology veteran who once led engineering at Flipkart Wholesale) in December 2021, WeTrade made cryptocurrency trading smooth, accessible and rewarding to everyday Indians by eliminating common barriers to entry.
The Problem — 📈 Back then, cryptocurrency trading was too expensive and complicated for average Indian users.
The high trading fees and clunky user interfaces made entering the crypto world feel like a chore.
The Solution — 🤑 WeTrade offered zero trading fees and made crypto investing simple and rewarding with features like:
Transactions starting as low as INR 100
Instant 1% cashback on all cryptocurrency purchases
100% tax deducted at source (TDS) cashback (effectively covering the 1% TDS that went into effect in India in July 2022)
14% interest per year on USDT holdings (passive income opportunities)
✌🏻 In short, WeTrade used this dual approach (eliminating fees + rewarding users) to disrupt traditional crypto exchanges and build a loyal and enthusiastic user base.
 | Their tagline? → India’s most rewarding crypto app 🤑 It worked! 🔥 WeTrade quickly gained traction after its launch in 2022. Within just its first month of operation, it achieved:
At its peak, WeTrade aimed to hit ₹100 crore (~$12 million) in turnover by FY23. Their rewards program and “TDS shield” made them a hit with middle-class investors looking to dabble in crypto without getting wrecked by fees or taxes. |
WeTrade was utilising advanced technology tools to provide users with a seamless experience while maintaining high levels of security, aiming to play a pivotal role in making India more crypto-friendly
Its ambition?
🪙 To become "a one-stop-shop for anyone who wants exposure to the set of assets in the cryptocurrency world".
📉 The Fall of WeTrade
Well… the crypto party didn’t last.
🤔 By January 2023, WeTrade announced it was shutting down, blaming the “deepening crypto winter” and India’s hostile regulatory climate.
📌 Here’s what happened to WeTrade:
WeTrade started in 2022 with a vision to make trading in cryptocurrency easy and rewarding. However, with the crypto winter deepening and the ambience turning increasingly hostile, we have decided to pause our services.
🚀 The Crypto Party (to the moon…)
Jan 2022 — WeTrade was launched, riding the crypto hype wave.
Aug 2022 — 0️⃣ Offered zero trading fees on over 50 cryptocurrencies including popular names like Bitcoin, Ethereum and Solana.
The goal? To attract a huge number of users who were traditionally priced out of high-fee platforms.
Oct 2022 — 🤑 Launched “weSave”, an innovative savings product to help users earn a fixed interest (up to 14% per annum, credited daily) on their stable cryptocurrency investments.
No lock-in period
Cashback reward system to cover TDS charges
Oh, and WeTrade also raised ₹15 crore (~$1.8 million) in funding from investors.
🥶 The Crypto Winter
17 Jan 2023 — 🥶 Crypto winter happened (FTX + Luna collapsed) and regulations tightened, imposing a 30% tax on crypto trading income and a 1% Tax Deducted at Source (TDS) on transactions — which contributed to a sharp decline in trading volumes.
The result? No trading volumes → No liquidity → No revenue
🚨 WeTrade froze all trading activities, disables deposits, and instructs users to sell their crypto holdings and withdraw funds within 30 days.
Feb 2023 — ☠️ WeTrade announces its closure on LinkedIn, blaming the “deepening crypto winter” and India’s “hostile regulatory ambience”.
All trading activities were ceased.
All employees were laid off.
The top priority was to return customers’ funds promptly.
⚡️ WeTrade’s story lasted just 14 months — a flash in the pan for India’s crypto scene. By early 2023, its app was ghosted, its team disbanded, and its founder silent.
🏄🏻♂️ In my opinion, I still think crypto is here to stay. But as many waves we’ve seen in the past, timing and execution matter. Many crypto startups died during the crypto winter, but there are also many crypto startups that survived and are still thriving.
The bottom line? If you can last longer than anyone else, you’ll win. Just stay in the game, and don’t die.
Want to learn more about WeTrade’s downfall?
⚠️ 2 Mistakes
Mistake 1: Lack of contingency planning for market downturns
WeTrade partied like crypto prices would only go ↗️.
Their zero-fee model, cashbacks, and 14% stablecoin returns relied on constant trading volume and bull market hype. Then… 2022 happened. Bitcoin crashed 65%, FTX imploded, and India slapped crypto with a 30% tax + 1% TDS.
Not just that, WeTrade bet on user growth and future VC funding. When the crypto winter hit, their “free rewards” model bled cash like a stabbed stablecoin.
🥶 So when “crypto winter” came, WeTrade didn’t have a plan to ride out the storm. They ended up freezing trading activities, halting deposits, and eventually shutting down — laying off the whole team in the process.
🥚 Their strategy was “all eggs in one basket” — if trading stopped, everything collapsed.
Mistake 2: High-risk products, low-risk planning
WeTrade’s “weSave” product promised 14% returns on stablecoins — no lock-in, no TDS. Sounds sexy, but where’d that yield come from? Probably risky DeFi protocols (cough Terra Luna 😷). When crypto crashed, users panicked and yanked funds, causing a liquidity crisis.
In crypto, trust > hype. If you’re selling yields, show users the how (transparency) and have a “oh sh*t” fund.
Boring? Maybe. Alive? Definitely.
🧠 3 Lessons Learned
Lesson 1: Always be paranoid and plan for the worst
Market downturns are inevitable. How you prepare for them can make the difference between weathering the storm or going under.
🌮 Key Takeaways:
🥅 Create a financial safety net
Set aside a portion of all funding (i.e. 15–20%) as a reserve for emergencies. This “rainy day fund” can help cover operating costs if shit happens that might suddenly increase operational costs.
With a healthy cash buffer, you’ll have the flexibility to maintain operations during downturns, keep the lights on, and protect your team from immediate layoffs.
💰 Diversify revenue streams
Having a single revenue stream is like having a single point of failure. When this stream gets disrupted, suddenly the whole business is in crisis — not good.
For example, if you’re running a coffee business, you can introduce a coffee subscription service where customers pay a monthly fee to receive a set number of beverages per week.
Lesson 2: Know your market dynamics and regulatory foresight
The crypto market in India is not just about innovative features but also about understanding — and preparing for — the regulatory environment and market volatility.
🌮 Key Takeaways:
🤝🏻 Engage directly with regulatory bodies
Proactively build relationships with regulatory bodies and legal experts who focus on crypto and fintech sectors.
When you’re in the loop, you can influence policy discussions or at least prepare your business model ahead of time, reducing the shock factor when new regulations hit.
For instance, if a new regulation about TDS or capital gains is on the horizon, you'll be ready to pivot your strategy—perhaps by adjusting your cashback models or rethinking your user onboarding processes.
🤔 Regular strategy reviews by asking “what-if”
Develop detailed “what-if” scenarios that range from moderate market dips to drastic regulatory crackdowns.
What if India bans P2P crypto trades?
What if RBI tightens KYC rules?
Incorporating scenario planning into your routine doesn’t just help with crisis management — it also builds internal agility.
If you can model multiple “downside” scenarios, you’ll be prepared to pivot quickly and keep your business resilient when shit happens.
Lesson 3: Over-reliance on a fragile business model
⚔️ WeTrade’s gimmick of zero trading fees paired with attractive rewards was a double-edged sword.
Initially, these features built rapid user engagement. However, as trading volumes dried up during the crypto winter, their revenue engine got disrupted because they depended too much on high volumes and the rewards program to drive income—without backup revenue streams.
Wrong move.
🌮 Key Takeaways:
💵 Have a sustainable business model
A sustainable business model shouldn’t be built on just one trick.
Diversify your revenue — perhaps by offering premium services, advanced trading tools, or even subscription plans.
Analyse competitors with robust multi-revenue models to learn how they balance free features with monetised offerings.
🔗 The Runway Insights
The new way to build software (Link)
How to ship like a startup (Link)
A guide to disrupting incumbents (Link)
How I spent 17,784 hours in 5 years as a startup founder (Link)
How to ask the right questions in VC fundraising meetings (Link)
The Overfunding Trap: Why raising more than you need can harm your startup (Link)
💰 Southeast Asia Funding Radar
Fore Coffee raises $21M in oversubscribed IPO by over 200x (Link)
Cinch bags $28.8M led by Monk’s Hill Ventures to expand device-as-a-service platform across Asia (Link)
Flagright raises $4.3M to use AI to combat financial crime (Link)
WeLab, a fintech unicorn, is backed by HKIC to bring Hong Kong startups to Southeast Asia (Link)
Hoopi raises seed funding to expand collectibles platform across Southeast Asia (Link)
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Validating ideas & building MVPs
Tech & product development
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Growing & monetising newsletters
Attract customers & investors by building a solid founder brand on LinkedIn
Promote your business to 18,000+ founders: Acquire high-value leads and customers for your business by getting your brand in front of highly engaged startup founders and operators in Asia.
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That’s all for today
Thanks for reading. I hope you enjoyed today's issue. More than that, I hope you’ve learned some actionable tips to build and grow your business.
You can always write to me by simply replying to this newsletter and we can chat.
See you again next week.
- Admond
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