India, currency circle\'s outsourcing factory

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

This is related to a data breach case with estimated losses of up to US$400 million. On June 2 last year, according to a Reuters report, six people familiar with the matter revealed to Reuters that Coinbase had known as early as January last year that its customer service outsourcing contractor TaskUs had a user data breach. An employee at the customer service center set up by the company in Indore, India, was found using his private mobile phone to take pictures of his work computer and was suspected of selling Coinbase user data to hackers with an accomplice. Hackers used this information to impersonate Coinbase employees, defrauded victims of cryptocurrency, and demanded a $20 million ransom for user data from Coinbase.

However, after such a serious security incident, although Coinbase has made progress in chasing down the people involved, there is no clear public information that they will turn to hiring employees from other countries and regions, or the United States. Such a trend has caused many complaints on X, arguing that outsourcing services from India are unreliable and Coinbase lacks a serious attitude towards user data security.

Although TaskUs is not an Indian company, the problem does occur with TaskUs \'Indian branch. Coinbase is not the only company that has suffered losses because Indian outsourcing employees took the initiative to do evil and make profits.

One of the most famous \"ghost\" cases in the e-commerce field is that Amazon outsourced \"seller support\" and \"anti-fraud review\" services to third-party service providers in Hyderabad and Bangalore, India. Some Indian outsourcing employees were communicated and bought by third-party sellers through Telegram and other channels. Employees can receive cash rewards ranging from hundreds to thousands of dollars every time negative comments are deleted, blocked accounts are restored, or internal sales data of competitors are leaked. The monthly salary of these outsourcing employees is only about US$300 - 500.

Microsoft has also outsourced its basic technical support services to third-party service providers in India. Similarly, outsourcing employees are not satisfied with their meager salaries and will sell information to fraud gangs, and even proactively guide customers to click on phishing websites or purchase fake services during work hours.

The above models that entrust corporate services such as customer service, customer support, and auditing to external service providers are called \"BPO(Business Process Outsourcing)\". To reduce costs, improve efficiency, and focus on core businesses, leave these repetitive and non-creative corporate processes to third parties.

Despite all the problems, India is still the king of the global outsourcing industry. A research report by Astute Analytica shows that the size of India\'s BPO market will already be approximately US$50 billion in 2024 and is expected to reach US$139.35 billion by 2033. Through the business process of voice solutions, Indians solved 35% of the entire industry. Instead of voice (email, online chat, etc.) business processes, Indians handle 45% of the entire industry.

The huge size brings chaos caused by structural problems. It can solve problems, but it can cause problems itself. Indian outsourcing, what is the real situation?

It\'s cheap and fragrant, but it can\'t stop it.

Everyone will say that one of the advantages of India\'s outsourcing is definitely \"cheap\". There is nothing wrong with this, and even explains why Coinbase suffered a data breach that cost up to $400 million.

When TaskUs finally discovered the data breach, Ashita Mishra, the mastermind of the case, had data on more than 10,000 Coinbase users on her mobile phone, and the employee and other accomplices were paid US$200 for every photo they took of user account data. Ashita Mishra sometimes takes up to 200 photos a day.

According to data from 6figr.com, the salary offered by TaskUs for customer service support positions is an annual salary of 330,000 - 400,000 rupees, which translates into approximately US$3700 - 4440. Converted into daily salary, the daily salary will not exceed $15.

In other words, Ashita Mishra\'s income from \"taking photos\" a day can be as high as 2600 times her daily salary. This is why hackers chose to bribe TaskUs \'outsourcing employees and why they were able to successfully bribe them.

In comparison, Coinbase\'s expected salary level for the \"Customer Support Agent\" position on web3.career is US$69,000-US$77,000.

There is such a huge salary gap between \"formal staffing\" and \"outsourcing\", but there is no stricter control over outsourcing employees in the setting of data access rights. This is the reason for this data security incident at Coinbase.

As long as the labor costs saved by outsourcing are greater than the money for accident compensation, these companies will continue. We cannot say that they are persistent short-sighted and choose to sacrifice long-term interests. After the event, these companies all took measures to prevent similar accidents from happening again. For example, the Indian customer service position that we saw earlier was directly recruited by Coinbase, which was changed from outsourcing to direct recruitment after the accident. The current Amazon Seller Support Center implements extreme physical control. Employees must hand in their mobile phones and smart watches before entering the office area, and paper and pens are strictly prohibited on their desks.

\"Cheap\" is of course a huge advantage, but if you switch the perspective to these ordinary outsourcing employees who do specific execution,\"cheap\" actually comes from the fact that outsourcing itself belongs to a labor arbitrage industry. The process of transferring work or production processes to locations with lower labor costs for arbitrage is itself difficult to escape layer after layer of \"subcontracting.\" An outsourcing contract from a large enterprise sometimes even has to be subcontracted 2-4 times, and commissions, management fees and profits are deducted for each subcontract.

Although there is no public data that allows us to know how much Coinbase pays TaskUs, TaskUs Indian employees can only get less than $15 a day. However, according to a research report on the outsourcing market by Astute Analytica last year, in first-tier cities in India, the monthly salary for each position is about 1.5- 20,000 rupees (about 165-220 US dollars), and it will be even lower in second-tier cities, ranging from 8,000 to 12,000 rupees (about 88-132 US dollars). What about the billing standards given by the outsourcing company as a service provider? Voice processes are $12 to $15 per hour, and non-voice processes are $18 to $22 per hour.

It\'s almost equivalent to working hard 24 hours a day for a month without sleep, and the outsourcing company will only pay you a salary worth one day. Because this job is too impressive and the mobility of personnel is extremely high, the employee turnover rate is as high as 30%, which is a level optimized from 50%.

You may think that it\'s just a phone call to do customer service. How high a salary do you want? In fact, the kind of global outsourcing that India accepts can test customer service to another level. In 2024, the United States will contribute 55-60% of India\'s outsourcing industry\'s revenue. Considering that India and the United States have a time difference of about 12 hours, you can basically squat in front of the phone or computer screen to achieve a working environment and life that will never see the sun. Work and rest. As an Indian customer service, the target of communication is European and American users. What you need is not only to be proficient in business knowledge, but also to minimize your accent so that the other party can understand it, and try to be familiar with the other party\'s dialect, word usage habits and culture so that it can be more efficient. Communicate efficiently.

Cheap is really so fragrant that it cannot be stopped, and it is indeed based on the hard work and sweat of the Indians at the bottom.

The counterattack of \"cheap labor\", the era of outsourcing in India

In the early 1990s, India\'s per capita salary was less than 1/10 of that in the United States. Not only that, India has a large highly educated workforce who can work in English. This led American managers to find that instead of finding expensive programmers at home, they might as well send tasks to India, where there were few obstacles in document exchanges and conference calls.

Not only is there no \"language barrier\" in communication, India and the United States have a time difference of about 12 hours. The American company passed on the task to India when it got off work, and the Indian employees started working; when the United States went to work the next day, the task was completed. This \"sun never sets\" development model greatly shortens the project cycle.

How about it? Does it sound like \"offline automatic upgrade\" like hanging up mobile games? This is also known as the \"time difference dividend.\"

As the saying goes,\"the right time, the right place, and the right place are in harmony.\" At the turn of the century more than 20 years ago, the emergence of the \"millennium bug\" crisis became the \"right time\" for the Indian IT industry. Faced with the complex and boring information and data storage problems caused by the \"Y2K bug\", European and American companies turned to subcontract their data processing work to Indian companies with cost and language advantages due to the shortage of IT talents and high labor costs. Indian companies have accumulated experience and customer channels in the process of solving the \"Y2K bug\" for European and American companies. Since then, they have become famous and the industry has entered the fast lane.

In order to get rid of the label of \"cheap labor\", Indians also came up with a good way that is feasible all over the world-textual research. In the late 1990s, nearly 75% of the global companies that achieved CMM Level 5 (the highest level of software productivity maturity) certification were Indian companies. With the certificate in hand, it means that a professional and procedural image has been established. Indians realized this nearly 30 years ago.

As it went on, the Indian government also found that this was a good business. In the IT industry, there is no need to lay bridges and roads in the physical sense. Once network cables and talents are in place, snowballs can be rolled. As a result, India established a large number of software technology parks (STPIs) early on to provide satellite links (to solve India\'s problems of poor infrastructure and power outages and network connections at that time) and tax exemptions. India\'s top universities also continue to cultivate outstanding talents related to the industry.

In this way, India gradually explored a complete formula for conquering the global outsourcing market-cheap English talents + seizing historical opportunities (Y2K bug)+ textual research and establishing professional process guarantees + government support + continuous talent training. With this formula, they did it.

But now, this formula has also begun to diverge.

High-end \"offshore outsourcing\", low-end \"struggling\"

Indians are certainly not willing to do low-end outsourcing of repetitive work. They are still developing. In recent years, more and more well-known companies have established GCC(Global Capabilities Centers) in India. At present, India already has more than 1900 GCC companies, of which about 35% of Fortune 500 companies have such \"wholly owned\" technology and R & D bases in India.

These companies include giants from all walks of life, such as JPMorgan Chase, Goldman Sachs, HSBC, Wells Fargo, etc. in the financial field, Microsoft, Amazon, Google, etc. in the technology field, Wal-Mart, Target, etc. in the retail field.

These GCCs no longer handle repetitive tasks such as customer service and basic code maintenance. Instead, they are directly affiliated with the parent company and are responsible for global and core businesses. The R & D and innovation activities of the Indian GCC have already contributed more than or even 50% of the industry\'s revenue. About 45% of the Indian GCC has begun to manage the end-to-end global product life cycle, from conceptual design to final release, completed in India. In other words, Indians are not only cheap and fragrant, but also do have something.

GCC is like these world\'s leading companies leaving their homeland and going to India for an \"offshore outsourcing\".

It is hard to imagine that even Japanese companies have significantly begun to flee their homeland in the past year to build GCC in India. Honda and Hitachi will expand their R & D in India in 2025. The reason they gave was that Japan\'s domestic digital transformation was too slow and there was a shortage of talents, while in India, the most cutting-edge AI and software-defined vehicle (SDV) technology could be obtained at 1/3 of Japan\'s cost.

In India, if you want to recruit 500 engineers with specific cloud technologies in a month, the recruitment market in Bangalore or Hyderabad responds quickly. India currently has about 20% of the world\'s digitally skilled talents. In the fields of generative AI, cybersecurity and cloud architecture, the scale of the talent pool is unmatched in other regions (such as Eastern Europe or Latin America).

College students graduating from India also love to go to these GCCs. They do not have to leave their homes and enjoy the same benefits and career development paths as employees of these large global companies. The flywheel is running again.

As for repetitive and non-creative outsourcing work such as customer service and auditing, although there are some Vietnam and the Philippines that can wrestle arms with India on the basis of \"cheap\", the most threatening opponent to India is still the rapidly evolving AI technology.

Conclusion

Therefore, Coinbase\'s attitude is not surprising. It is a pragmatic business decision, but the accident also exposed a major loophole in previous internal management.

Is there a loophole? No problem, Coinbase should scratch and make up for it, and then we will continue to run and dance.

The reason why Indian outsourcing can be \"invincible\" is also very clear here-there are not many talents in places cheaper than it, and places with better English are not as cheap as it, and there are not many talents in places cheaper than it...

But this advantage of making big companies satisfied and laughing is not a source of fatigue and sadness for employees.