Many traders have been unable to position bets on WazirX, India’s largest cryptocurrency exchange, since Saturday morning due to a lack of funds.
Punters expressed their dissatisfaction on social media, and the exchange, WazirX, responded that the delay in accepting funds was due to a “network problem at our banking partner’s end.”
” It promised that the money that was debited from traders’ accounts would be credited back ASAP. ‘Your funds are safe,” assured the exchange.
In the run-up to Tesla CEO and crypto supporter Elon Musk’s appearance on ‘Saturday Night Live,’ a sketch comedy show on US television, a number of traders in India were eager to create new positions.
Anirudh Gotety, a Mumbai-based commercial lawyer said, “But, in a way, it was a blessing in disguise. Traders everywhere had felt that Musk would talk up Dogecoin (one of the hottest crypto-currencies). In hindsight, a number of them were shielded from a dramatic dip in the value of Dogecoin after Musk called Dogecoin a “hustle”.
Although the payment snafu may have saved some WazirX traders – Dogecoin fell 28% after Musk spoke – the weekend developments served as a reminder of the brewing problem between the cryptocurrency sector and Indian banks.
An investor posted a screenshot of an early message from the exchange, which said that there was a “delay in Paytm Payments Bank deposits.” The message was changed to “delay in IMPS (immediate payment service) deposits from banking partner’s end” later in the day, and the exchange removed the reference to the payment bank.
After ICICI Bank stopped processing payments for crypto-currency traders, most WazirX traders and investors have been transferring funds to a payment processor firm that has an account with Paytm Payments Bank through NEFT, RTGS, and IMPS. The payment company, which is a third-party, serves as an aggregator for WazirX’s investor fund traffic.
Paytm Payments Bank’s spokesman categorically denied that there was a technical problem. Paytm official said, “ “Our in-house technology infrastructure is among the best in the world and is one of the key reasons for the trusted and long-lasting relationship that we have with our partners. We would like to confirm that our systems are running smoothly and there is no issue with any of the transactions. All our users, clients and merchant partners continue to experience seamless and efficient payment settlements.”
While the National Payments Corporation of India (NPCI), the local umbrella body, has not blocked fund movements for crypto-currency trades, a half-dozen major Indian banks, including ICICI and Axis, have limited payments related to crypto trades. Crypto exchanges are concerned that if more banks switch off payment options because of the perception that cryptos do not have RBI approval, cryptocurrency holders would find it difficult to exit.
Another exchange, ZebPay, recently informed investors that the exchange’s beneficiary bank account details will change, and that a follow-up email with new account details will be sent, according to an industry observer.
In India, the crypto currency industry is pounding on the doors of the government and regulators, as well as attempting to rally support on social media. WazirX COO Siddharth Menon tweeted on Sunday, said, ”Please don’t use UPI for deposits. Axis Bank doesn’t support (the) Crypto community, so they’ve disabled the UPI service for crypto business, ignoring Supreme Court’s verdict. We’ve removed this option from our app. Reach out to your banks & request them to support you; Crypto users.”
The industry body IndiaTech.org, which represents technology startups and investors, has introduced a mechanism to monitor and minimise the risks of cryptocurrencies while also exploring their potential.