Indian cryptocurrency exchanges WazirX and CoinDCX suffered hours of downtime late Wednesday as the price of Bitcoin, the world’s leading cryptocurrency, fell sharply to a multi-month low.
Bitcoin has depreciated since Monday after Tesla CEO Elon Musk said the electric car maker would no longer accept payments in bitcoin amid concerns about high power consumption for bitcoin mining. Musk’s endorsement of crypto this year was instrumental in pushing Bitcoin prices to over $ 64,895 (47.3 lakh) in April. Experts claim that China’s tightening of restrictions preventing payment companies and financial institutions from providing cryptocurrency-related services also played a major role in Bitcoin price plummeting.
What did we learn today?
That Indian crypto exchanges are unreliable.
– Forced logout
– App / website crash
– Trades stopped, orders not executed
– Lack of transparency about fees
– Price differences # CoinDCX #WazirX are responsible.
Otherwise, close the shop.
– Abray (@abhpry) May 19, 2021
On Wednesday, the price of Bitcoin fell 30% to USD 31,000 in a matter of hours. As the price fell, many investors tried to sell their crypto assets to avoid heavy losses, but were unable to because the WazirX and CoinDCX servers crashed and these deals refused. Other investors tried to buy cryptocurrencies while the price was low, but the transactions failed, resulting in a loss of valuable time before Bitcoin prices rose back to $ 40,000. Several investors converted their cryptocurrencies to INR and initiated withdrawal requests, but complained that although the amount had been withdrawn from their crypto wallets, it was not reflected in their bank accounts.
In particular, this is the second instance of the Mumbai-based WazirX server to crash this month and the third since April. Earlier this month, WazirX experienced a severe lag on its mobile application and website, as did the price of Dogecoin, a meme cryptocurrency, up around 40% in just a few hours. When the price of the coin went up, many investors had tried to sell their Dogecoins for a profit. However, WazirX’s server was unable to process these transactions immediately, resulting in significant losses for investors.
The company had said at the time that the delay was due to a 10x increase in concurrent users that its server couldn’t handle. WazirX has stated that the recent problems with its mobile application are the result of a significant increase in user logins and trading volume and that the company is scaling up to address these concerns.
On Wednesday, WazirX tweeted, “We are working on a solution to the issues related to the WazirX app / website and will update you when it becomes available again.” Since then, there has been no official statement from the company on the matter.
Investors have complained that they cannot take advantage of cryptocurrencies as an asset class because platforms like WazirX failed to provide a satisfactory user experience.
What’s the point of this app if we can’t buy dips? My deposit is not reflected from 4 hours.
Please fix the problem before we all switch to another platform # wazirxdown # wazirxcrash @ NischalShetty @WazirXIndia https://t.co/mg3tJiWK7M
– Shiekh Taqwa Ayub (@taqwa_ayub) May 19, 2021
Several users have reported similar issues with another Mumbai crypto exchange, CoinDCX, which was unable to process transactions while the price of Bitcoin fluctuated late Wednesday.
I cannot log into my account !! Wth is wrong with you guys! Where is your 24/7 customer support? @CoinDCX @smtgpt @nrjkhandelwal
I hope this is not a scam! These are all my savings. Please help. #coindcx #wazirx
– Dev Ssaluja (@dev_sal) May 19, 2021
CoinDCX took note of users’ complaints and tweeted on Wednesday, “Due to the high volume of users, we know that some of our users like you may have issues with the services on our website and apps.”
On a blog post he added, “We are writing this to make sure our team has already identified the issues and is working to resolve them at the earliest.”
While Wazirx claims to have 2 million users, CoinDCX has 400,000 investors trading on its platform.
It was reported earlier this month that several Indian banks have ceased services to Indian crypto companies due to an informal opinion by the Reserve Bank of India (RBI). This is despite the March 2020 Supreme Court repealing the 2018 RBI circular that prevented banks from providing services to crypto exchanges.
ICICI Bank, one of the last major lenders to provide services to crypto companies, has now blocked these companies’ checking accounts. The private sector lender has also reportedly ordered payment gateways to shut down its net banking services for merchants who buy or sell cryptocurrencies.
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