India, the Outsourcing Hub of the Crypto World

On December 27, 2025, Coinbase CEO Brian Armstrong tweeted that the Hyderabad police in India had arrested a former Coinbase customer service employee and was still actively pursuing more suspects.

This is related to a massive data breach incident that is estimated to have resulted in losses of up to $4 billion. On June 2nd of last year, according to Reuters, six sources familiar with the matter revealed to Reuters that Coinbase had known as early as January of last year that its customer service outsourcing partner, TaskUs, had experienced a user data leak at its call center in Hyderabad, India. An employee of the company was found to have used their personal phone to take pictures of work computers and was suspected of colluding with an accomplice to sell Coinbase user data to hackers. The hackers used this information to impersonate Coinbase employees, scam cryptocurrency holders, and demand a $20 million ransom from Coinbase for the user data.

However, despite making progress in pursuing the suspects after such a serious security incident, Coinbase has not publicly indicated a clear shift towards hiring employees from other countries or regions or within the U.S. This move has sparked considerable discontent on X, with many expressing dissatisfaction, stating that outsourcing services from India are unreliable and that Coinbase lacks a serious attitude towards user data security.

While TaskUs is not an Indian company, the issue did indeed occur at TaskUs's Indian subsidiary. Coinbase is not the only company that has suffered losses due to malicious actions by Indian outsourcing employees.

One of the most famous "insider" cases in the e-commerce sector is when Amazon outsourced "seller support" and "anti-fraud verification" operations to third-party service providers in Hyderabad and Bangalore, India. Some Indian outsourced employees were communicated with and bribed by third-party sellers through channels like Telegram to perform actions such as deleting negative reviews, reinstating banned accounts, or leaking competitors' internal sales data. Employees could receive cash rewards ranging from hundreds to thousands of dollars, while their monthly salaries were only around $300 to $500.

Microsoft also outsourced its basic technical support services to third-party service providers in India. Similarly, disgruntled outsourced employees, dissatisfied with meager wages, sold information to scam groups, and even actively directed customers to phishing sites or persuaded them to purchase fake services during work hours.

The model where customer service, support, review, and other business functions are outsourced to external service providers is known as "BPO (Business Process Outsourcing)." To reduce costs, improve efficiency, and focus on core business operations, these repetitive, non-creative business processes are handed over to third parties.

Despite facing numerous issues, India remains the king of the global outsourcing industry. A research report by Astute Analytica shows that by 2024, the Indian BPO market size had already reached about $50 billion, and is projected to reach $139.35 billion by 2033. Through voice-enabled business processes, Indians handle 35% of the entire industry. For non-voice processes (email, online chat, etc.), Indians tackle 45% of the industry.

With its massive scale comes chaos caused by structural issues. While it can solve problems, it can also bring problems of its own. What is the true situation behind Indian outsourcing?

Cheap is Irresistible

Everyone would say that one of the absolute advantages of Indian outsourcing is "affordability." This is true, and it even explains why Coinbase suffered a massive data breach resulting in a loss of $400 million.

When TaskUs eventually discovered the data breach, the mastermind behind the incident, Ashita Mishra, had stored the data of over 10,000 Coinbase users on her phone. The employee and her accomplices would receive $200 for every photo they took of a user account's data. Ashita Mishra sometimes took as many as 200 photos in a day.

According to data from 6figr.com, TaskUs offered an annual salary of 330,000 to 400,000 Indian Rupees for a customer support position, which is approximately $3,700 to $4,440 in USD. Converted to a daily wage, the salary does not exceed $15 per day.

This means that Ashita Mishra's daily income from "taking photos" can be over 2,600 times her daily wage, which is why hackers choose to bribe TaskUs outsourced employees and why bribery is successful.

On the other hand, Coinbase's expected salary range for a "Customer Support Agent" position on web3.career is $69,000 to $77,000.

With such a huge salary gap between "regular employment" and "outsourcing," but with no stricter controls on data access rights for outsourced employees, this is the reason for Coinbase's data security incident.

As long as the cost savings from outsourcing are greater than the compensation for accidents, these companies will continue to exist. We cannot say that they are short-sighted in terms of sustainability or that they choose to sacrifice long-term benefits. After the fact, these companies have all taken measures to prevent similar accidents from happening again. For example, as we saw earlier, Coinbase changed its outsourcing to direct hiring for its customer service positions in India after an incident. The current Amazon seller support center implements extreme physical controls, where employees must surrender their 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 focus to these ordinary outsourcing workers who perform specific tasks, "cheap" actually stems from the fact that outsourcing itself is a form of labor arbitrage. The process of moving work or production processes to locations with lower labor costs for arbitrage is inherently difficult to escape from various layers of "subcontracting." An outsourcing contract from a large enterprise sometimes undergoes subcontracting 2-4 more times, with each subcontracting deducting commissions, management fees, and profits.

Although there is no publicly available data to let us know how much Coinbase actually paid TaskUs, resulting in TaskUs' Indian employees receiving only $15 a day in wages. However, according to a research report on the outsourcing market published by Astute Analytica last year, in tier 1 Indian cities, the average monthly salary for a position is approximately 15,000 - 20,000 rupees (about $165 - $220), which is even lower in tier 2 cities at 8,000 - 12,000 rupees (about $88 - $132). So, what billing standards do outsourcing companies offer as service providers? $12 to $15 per hour for voice processes, and $18 to $22 per hour for non-voice processes.

It's almost like pulling an all-nighter working non-stop for a month, and the outsourcing company only pays you the wage equivalent to 1 day. Because this job is extremely challenging, with a very high turnover rate of up to 30%, an improvement from the previous 50%.

You might think, "Just making some customer service calls, why should they get paid so much?" In reality, this global outsourcing taken on by India sets a whole new level of challenge for customer service. In 2024, the U.S. contributed 55-60% of revenue to the Indian outsourcing industry. Considering the roughly 12-hour time difference between India and the U.S., workers basically maintain a work and life routine where they are constantly on call in front of a phone or computer screen. As an Indian customer service representative catering to European and American users, mastering the business knowledge isn't enough. They need to minimize their accent for better understanding, familiarize themselves with the dialect, terminology, and culture of the other party to communicate more efficiently.

Cheap is indeed irresistibly attractive, but it is also truly built on the hard work and sweat of the Indian workforce.

The Rise of "Cheap Labor": The Journey of Indian Outsourcing

In the early 1990s, India's per capita income was less than 1/10 of the United States'. Moreover, India possessed a vast workforce that was well-educated and could work in English. This prompted American managers to realize that instead of hiring expensive programmers domestically, it was better to outsource tasks to India, where there were almost no barriers in document exchange and conference calls.

Not only was there no "language barrier" in communication, but there was also around a 12-hour time difference between India and the United States. American companies would hand over tasks to India when they closed for the day, and Indian employees would start working; by the time Americans started their workday the next day, the tasks were already completed. This "round-the-clock" development model significantly shortened project timelines.

So, doesn't it sound like that satisfying feeling of "offline automatic upgrades" in idle mobile games? This is also known as the "time zone advantage."

And as the saying goes, "opportunity favors the prepared mind." At the turn of the century over 20 years ago, the appearance of the "Y2K bug" crisis became the "opportunity" for the Indian IT industry. Faced with the complex and tedious information and data storage issues caused by the Y2K bug, Western companies, due to a shortage of IT talent and high labor costs, began outsourcing their data processing work to Indian companies that had cost and language advantages. Indian companies, in the process of resolving the "Y2K bug" for Western companies, accumulated experience and customer channels, garnering a reputation and propelling the industry into the fast lane.

To shed the label of "cheap labor," Indians also came up with a universally applicable solution—certification. By the late 1990s, nearly 75% of the globally certified CMM Level 5 (highest level of software production capability maturity) companies were Indian. With the certificate in hand, it meant that a professional and systematic image was established, something that Indians realized almost 30 years ago.

In the course of these developments, the Indian government also saw this as a lucrative business. The IT industry did not require physical infrastructure; with the internet and a talented workforce in place, it could snowball. Consequently, India established a large number of Software Technology Parks (STPI) very early on, providing satellite links (to address India's infrastructure and power outage issues at that time) and tax incentives. India's top universities also consistently nurtured excellent talent relevant to the industry.

Thus, India gradually explored and honed the complete formula to conquer the global outsourcing market—cheap English-speaking talent + seizing historical opportunities (Y2K bug) + certification to establish professional processes + government support + ongoing talent development. With this formula, they succeeded.

But now, this formula is also starting to diverge.

High-end "Offshore Outsourcing" vs Low-end "Struggle for Survival"

Indians are no longer content with low-end outsourcing focused on repetitive tasks; they are moving up the value chain. In recent years, an increasing number of prominent companies have established Global Capability Centers (GCCs) in India. Currently, India is home to over 1900 GCCs, with approximately 35% of the Fortune 500 companies having this type of wholly-owned technical and R&D base in India.

These companies span various industries, including financial giants like JPMorgan Chase, Goldman Sachs, HSBC, Wells Fargo, as well as technology leaders like Microsoft, Amazon, Google, and retail players like Walmart, Target, and more.

These GCCs are no longer handling tasks like customer service and basic code maintenance; instead, they are directly owned by the parent company and responsible for global and core business functions. The R&D and innovation activities of India's GCCs have contributed to over 50% of the industry's revenue. Around 45% of India's GCCs have started managing end-to-end global product lifecycles, completing everything from conceptual design to final release in India. In essence, Indians are not only cost-effective but also truly capable.

These GCCs are like these global juggernauts relocating offshore to India, engaging in "offshore outsourcing."

Surprisingly, even Japanese companies have significantly started moving away from their homeland in the past year to establish GCCs in India. Honda and Hitachi have expanded their research and development presence in India by 2025. They cited reasons such as slow domestic digitization in Japan, talent shortages, and the ability to access cutting-edge AI and Software Defined Vehicle (SDV) technology in India at one-third of the cost in Japan.

In India, if you want to hire 500 engineers with specific cloud technology expertise within a month, the recruitment markets in Bangalore or Hyderabad can quickly respond. India currently holds about 20% of the global digital skills talent. In fields like Generative AI, cybersecurity, and cloud architecture, its talent pool size is unmatched by other regions like Eastern Europe or Latin America.

Even Indian university graduates prefer to join these GCCs in their own country as they don't have to leave their homeland and can enjoy benefits and career paths similar to those of employees at these global enterprises' headquarters. The flywheel is spinning again.

As for repetitive, non-creative outsourcing tasks such as customer service and auditing, while there are countries like Vietnam and the Philippines emerging that can compete with India based on cost, India's most significant threat comes from continually evolving AI technology.

Epilogue

Therefore, Coinbase's attitude is not surprising; it is a practical business decision. However, the occurrence of the incident also exposed a major internal management flaw.

A flaw? No problem, let's acknowledge and fix it at Coinbase, and then we'll just keep doing what we do best.

As for the reason why Indian outsourcing can "challenge the world," it is also very clear by now—there are no other places as cheap as India with as much talent, where English is better than India, and where it is cheaper, there is not as much talent...

However, this advantage that satisfies and enables smooth interactions between large companies is also a source of exhaustion and bitterness for the employees.