India, the Outsourcing Factory of the Crypto World
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India, the Outsourcing Factory of the Crypto World
Why is Indian outsourcing still favored despite $4 billion in heavy losses?
Navigating Web3 tides with focused insightsWritten by: Cookie
On December 27, 2025, Coinbase CEO Brian Armstrong tweeted announcing that the Hyderabad police in India had arrested a former Coinbase customer service employee and were continuing to pursue more individuals involved in the case.
This is related to a data breach case with estimated losses of up to $400 million. On June 2 of last year, according to a Reuters report, six informed sources revealed to Reuters that Coinbase had known as early as January of last year about a user data breach at TaskUs, the company handling its outsourced customer service. An employee at a customer service center established by the company in Indore, India, was found using their personal mobile phone to photograph work computers and was suspected of selling Coinbase user data to hackers along with an accomplice. Hackers used this information to impersonate Coinbase employees, defraud victims of their cryptocurrency, and demanded a $20 million ransom from Coinbase for the user data.
However, after such a serious security incident, although Coinbase made progress in pursuing those involved, there was no clear public information indicating they would shift to hiring employees from other countries and regions, or from within the United States. This development sparked considerable dissatisfaction on X, with many believing that outsourced services from India are unreliable and that Coinbase lacks a serious attitude towards user data security.
Although TaskUs is not an Indian company, the problem indeed occurred at TaskUs's Indian branch. And Coinbase is not the only company to suffer losses due to Indian outsourced employees actively engaging in malicious activities for profit.
One of the most famous "insider" cases in the e-commerce field involves Amazon outsourcing its "Seller Support" and "Anti-Fraud Review" operations to third-party service providers located in Hyderabad and Bangalore, India. Some Indian outsourced employees were contacted and bribed by third-party sellers through channels like Telegram. For each deletion of a negative review, restoration of a blocked account, or leak of a competitor's internal sales data, employees could receive cash rewards ranging from a few hundred to a few thousand dollars, while their monthly salaries were only about $300 – $500.
Microsoft also outsourced its basic technical support services to third-party service providers in India. Similarly, outsourced employees, dissatisfied with their meager salaries, sold information to fraud rings and even actively guided customers to click on phishing websites or purchase fake services during work hours.
The model of delegating corporate functions like customer service, customer support, and review to external service providers, as seen above, is called "BPO (Business Process Outsourcing)." To reduce costs, improve efficiency, and focus on core business, these highly repetitive, non-creative business processes are handed over to third parties.
Despite so many issues, India remains the global leader in the outsourcing industry. According to a research report from Astute Analytica, in 2024, the size of India's BPO market was already approximately $50 billion and is projected to reach $139.35 billion by 2033. For business processes resolved via voice, Indians handle 35% of the entire industry. For non-voice (email, online chat, etc.) business processes, Indians handle 45% of the entire industry.
The massive scale brings chaos stemming from structural issues. Capable of solving problems, yet itself capable of creating problems. Indian outsourcing, what is the real situation within?
Cheap is Irresistibly Good
Everyone says one of the advantages of Indian outsourcing is definitely "cheap." That's not wrong; in fact, it explains why Coinbase suffered a data breach with losses of up to $400 million.
When TaskUs finally discovered the data breach, the phone of the mastermind, Ashita Mishra, contained data from over 10,000 Coinbase users. This employee and other accomplices could receive $200 for each photo they took of user account data. Ashita Mishra sometimes took up to 200 photos in a single day.
According to data from 6figr.com, the salary TaskUs offers for customer support positions is 330,000 - 400,000 Indian Rupees per year, which converts to approximately $3,700 – $4,440. Calculated as a daily wage, the daily salary does not exceed $15.
In other words, Ashita Mishra's daily "photography" income could be over 2,600 times her daily salary. This is why hackers chose to bribe TaskUs's outsourced employees and why the bribery succeeded.
In comparison, the expected salary range Coinbase lists on web3.career for the "Customer Support Agent" position is $69,000 – $77,000.
There is such a huge salary gap between "full-time employees" and "outsourced staff," yet there was no stricter control over data access permissions for outsourced employees. This is the reason for Coinbase's data security incident.
As long as the labor cost savings from outsourcing are greater than the money paid for incident compensation, these companies will continue. We cannot simply say they are persistently short-sighted, choosing to sacrifice long-term interests. After the incidents, these companies took measures to prevent similar accidents from happening again. For example, the directly hired Indian customer service positions at Coinbase we saw earlier were changed from outsourced to direct hires after the incident. Amazon's current seller support centers implement extreme physical controls; employees must surrender their mobile phones and smartwatches before entering the office area, and paper and pens are strictly prohibited on desks.
"Cheap" is certainly a huge advantage. But if we shift our perspective to these ordinary outsourced employees doing the specific execution, "cheap" actually stems from outsourcing itself being a form of labor arbitrage industry. The process of transferring work or production to locations with lower labor costs for arbitrage inherently struggles to escape layers of "subcontracting." An outsourcing contract from a large enterprise might even be subcontracted 2-4 more times, with each subcontract deducting commissions, management fees, and profits.
Although there is no public data to tell us exactly how much Coinbase paid TaskUs, resulting in TaskUs's Indian employees earning less than $15 a day. However, according to a research report on the outsourcing market by Astute Analytica last year, in India's tier-one cities, the monthly salary offered per position is about 15,000 - 20,000 Rupees (approximately $165 - $220), and it's lower in tier-two cities, 8,000 - 12,000 Rupees (approximately $88 - $132). What about the billing standards given by outsourcing companies as service providers? $12 to $15 per hour for voice processes, $18 to $22 per hour for non-voice processes.
This is roughly equivalent to you working non-stop 24 hours a day for a full month, and the outsourcing company only pays you, the outsourced worker, a salary worth one day's work. Because this job is simply too grueling, personnel turnover is extremely high, with an employee attrition rate as high as 30%, and this is an optimized level down from 50%.
You might think, it's just answering calls and doing customer service, how high a salary do you expect? In reality, the global outsourcing that India undertakes presents customer service with challenges of another level. In 2024, the United States contributed 55 - 60% of the revenue to India's outsourcing industry. Considering the approximately 12-hour time difference between India and the US, it basically allows for a work environment and lifestyle where one can be glued to the phone or computer screen, never seeing daylight. As an Indian customer service representative communicating with European and American users, what is required is not only proficiency in business knowledge but also minimizing one's accent for better understanding by the other party, and becoming familiar with their dialects, word usage habits, and culture for more efficient communication.
Cheap is indeed irresistibly good, and it is indeed built upon the hard work and sweat of the lower-level Indian people.
The Counterattack of "Cheap Labor": The Path of Indian Outsourcing
In the early 1990s, India's per capita salary was less than 1/10th of that in the United States. Moreover, India possessed a vast pool of highly educated labor capable of working in English. This made American managers realize that instead of finding expensive programmers locally, it was better to send tasks to India, where both sides faced almost no barriers in document exchange and teleconferences.
Not only was there no "language barrier" in communication, but India also has an approximately 12-hour time difference with the US. American companies could send tasks to India when they got off work, and Indian employees would start working; by the next day when America started work, the tasks were already completed. This "sun-never-sets" development model greatly shortened project cycles.
How does that sound? Quite like the satisfying feeling of "offline auto-leveling" in idle mobile games? This is also known as the "time zone dividend."
As the saying goes, "favorable weather, geographical convenience, and harmonious human relations." At the turn of the century over 20 years ago, the emergence of the "Y2K" crisis became the "favorable weather" for India's IT industry. Faced with the massive and tedious information and data storage problems caused by Y2K, European and American enterprises, due to IT talent shortages and high labor costs, turned to subcontracting their company's data processing work to Indian enterprises with cost and language advantages. Indian enterprises, in the process of solving Y2K for European and American companies, accumulated experience and customer channels, gaining fame from then on, and the industry entered the fast lane.
To shed the label of "cheap labor," Indians also thought of a universally applicable good method—certification. In the late 1990s, nearly 75% of the enterprises globally that obtained CMM Level 5 (the highest level of software capability maturity model) certification were Indian companies. With certificates in hand, it meant an image of specialization and process standardization was established. Indians realized this nearly 30 years ago.
As things progressed, the Indian government also realized this was a good industry. The IT industry doesn't require physically building bridges and roads; with internet lines and talent in place, the snowball can start rolling. Therefore, India established a large number of Software Technology Parks of India (STPI) very early on, providing satellite links (solving India's poor infrastructure and power/internet outages at the time) and tax exemptions. India's top universities also continuously cultivate excellent talent relevant to the industry.
Thus, India gradually figured out the complete formula for conquering the global outsourcing market—cheap English-speaking talent + seizing historical opportunities (Y2K) + certification to establish professional process assurance + government support + continuous talent cultivation. With this formula, they succeeded.
But now, this formula is also beginning to show differentiation.
High-end "Offshore Outsourcing," Low-end "Struggling"
Indians, of course, are not content with only doing low-end outsourcing of repetitive work; they are still developing. In recent years, more and more well-known enterprises have established GCCs (Global Capability Centers) in India. Currently, India already has over 1,900 GCCs, with about 35% of Fortune 500 companies possessing this kind of "wholly-owned direct operation" technology and R&D base in India.
These enterprises include giants from various industries, such as JPMorgan Chase, Goldman Sachs, HSBC, Wells Fargo in finance; Microsoft, Amazon, Google in technology; Walmart, Target in retail.
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