NEW YORK (NYTIMES) – Mr Brian Armstrong, chief executive of the largest cryptocurrency exchange in the United States, travelled across the world to make an announcement in early April: Coinbase was bringing crypto to India.

In an auditorium in Bangalore, Mr Armstrong said Coinbase planned to set up a hub of 1,000 employees there by the end of this year. The company was investing in Indian start-ups and allowing local customers to buy and sell digital currencies on its exchange. For Coinbase, it was a chance to transform finance in a country of more than one billion people and lure new customers from across Asia.

“Namaste,” Mr Armstrong declared. “We come with humility and respect.”

But that week, Coinbase had some bad news. A government-backed group issued a statement suggesting that the company would be unable to use a crucial payments platform – a system that was supposed to allow Coinbase customers to convert their rupees into virtual currencies such as Bitcoin and Ether. Not long after its grand opening, Coinbase halted much of its trading service in India.

Coinbase rose to prominence as one of the first major crypto companies, a gateway to the chaotic world of digital assets for amateur investors. But as it has grown from plucky start-up to publicly traded company, its status as an industry leader has been threatened by a series of missteps and a steep decline in the crypto market over the past six months.

Coinbase is now at risk of squandering its head start, as nimbler competitors such as FTX and Binance continue expanding despite the downturn, according to interviews with crypto experts and 23 current and former Coinbase employees.

It has become “a bit of a chaotic situation” for Coinbase, said Mr Dan Dolev, an analyst at financial firm Mizuho. “It is the perfect storm.”

Some insiders attribute Coinbase’s problems partly to strategic missteps by executives whom Mr Armstrong tapped to turn the company into a crypto juggernaut. As crypto prices surged, Coinbase hired thousands of new employees, which led to overspending and bloat.

Some recruits came from Silicon Valley titans such as Google and Meta, including top executives. Now, employees say the company is unrecognisable from the one that dominated the early years of crypto, with some leaders who lack deep experience in the industry.

Despite its early start, Coinbase has never had a strong hold over the international market, which is dominated by Binance. The company went into India despite widespread uncertainty about how the government would react, an approach that industry experts considered unwise.

Then, in the spring, Coinbase unveiled its most-hyped product of the year, a marketplace for non-fungible tokens, the digital collectibles known as NFTs. But the marketplace failed to draw much interest and was criticised by NFT aficionados.

Not all of Coinbase’s recent struggles are of its own making. The steep decline in crypto prices has led to a drop in trading, which accounts for the vast majority of the company’s revenue. As the largest crypto company on the public market, Coinbase bears the brunt of the broader industry’s problems, with its stock price fluctuating in parallel with Bitcoin and other volatile cryptocurrencies. The company got a boost this week, when it announced a partnership with BlackRock, the world’s largest asset manager. Its stock was up almost 5 per cent at the close of trading on Thursday (Aug 4).

Mr Armstrong declined to be interviewed. But five of his top executives defended the company’s performance. In a series of interviews, they said Coinbase was developing an array of crypto products, some of which may take time to catch on, and emphasised that the company had weathered past downturns.