Bengaluru-based crypto startup Flint Labs has decided to discontinue its Flint Money app owing to several regulatory challenges, unfavourable market conditions among other issues.

“The combination of regulatory hurdles, negative market sentiment, and other challenges substantially limited our growth potential. With the mounting pressure from these factors and the responsibility to protect our users’ interests, we reached the difficult decision to sunset the Flint Money app in November 2022,” Flint Labs said in a blogpost.

It said that the negative regulatory climate in India raised the entry barrier for retail users, Flint Money’s target audience. Moreover, exorbitant tax rates in India rendered its post-tax returns uncompetitive, the crypto startup said.

Flint Money was launched in January 2022. Meanwhile, crypto crashes involving Terra, Blockfi, Celsius, 3AC, and Vauld adversely affected the perception of yield products. After the FTX crash, they witnessed a high withdrawal velocity as users sought to leave centralised products.

“We encountered substantial limitations on marketing channels worldwide, as our target audience primarily used Facebook and Instagram, platforms where we were unable to run advertisements, leading to hindered growth,” it added further.

However, after shutting down Flint Money, the Bengaluru-based startup reset its focus on GasPay, launched in March 2023, a Web3 solution that allows users to pay gas fees in any token.

It is to be noted that a gas fee is the term given to transaction fees on the Ethereum blockchain network. According to Ethereum’s developer pages, gas refers to the fee required to execute a transaction on Ethereum, regardless of transaction success or failure. While gas fees are paid in Ethereum’s native currency, ether (ETH), GasPay allows users to pay gas fees in any token.

“We recognised that one of the most significant barriers to mass adoption was the user experience (UX) issues that often discouraged newcomers to DeFi from CeFi. We saw an opportunity to enable users to pay gas fees in any token on any chain, ultimately making blockchains gasless. This insight led to the inception of our subsequent project, GasPay,” Flint Labs said in the blogpost.

As of April 2023, GasPay has more than 5,000 users who have collectively moved close to $1 Mn in volume, the startup claimed.

Flint was founded in 2021 by CRED ex-product managers– Anshu Agrawal and Akshit Bordia. The startup raised $5.1 Mn in seed funding round led by Sequoia Capital India, GFC and a clutch of other investors in January 2022.

Individual investors including Coinbase Ventures, Hashed, IOSG, Better Capital, CRED’s Kunal Shah, Polygon’s Sandeep Naliwal, Snapdeal’s Rohit Bansal also participated in the round.

The government brought crypto income and transactions under the tax net last year. It introduced a 30% tax on income from virtual digital assets (VDAs), including cryptos and non-fungible tokens (NFTs), in the 2022 Budget, along with a 1% TDS on such transactions.

However, the government is yet to come out with regulation for the crypto industry. In December, Minister of State for Finance Pankaj Chaudhary said that India’s long-pending crypto policy will be finalised after international collaboration and
risk evaluation.

Later,  Economic Affairs Secretary Ajay Seth said India is working with the Financial Stability Board (FSB) to reach a consensus on regulating cryptocurrencies during the country’s G20 presidency itself.