Annoyed punters took to social media and reached out to the exchange, WazirX which said that the delay in accepting funds was due to a “network issue 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.
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A number of traders in India were keen to build new positions in the run up to Tesla chief and crypto supporter Elon Musk’s appearance on ‘Saturday Night Live’ (SNL) a sketch comedy show on US television. “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”,” said Anirudh Gotety, a Mumbai-based commercial lawyer.
While the payment snag may have saved some of the traders on the WazirX platform – with Dogecoin falling 28% after Musk spoke – the weekend developments were a reminder of the problem brewing between crypto-currency sector and banks in India.
According to an early message – a screenshot of which was shared by an investor – the exchange said there was a “delay in Paytm Payments Bank deposits”. Later in the day, the exchange removed the reference to the payment bank, and the message was changed to “delay in IMPS (immediate payment service) deposits from banking partner’s end.”
With ICICI Bank stopping payments for crypto-currency traders, most traders and investors at WazirX have been using payment options like NEFT, RTGS and IMPS to transfer funds to a payment processor firm which has an account with Paytm Payments Bank. The payment firm, a third-party, acts as an aggregator processing the investor fund flow at WazirX.
A spokesman for Paytm Payments Bank strongly denied that there was any technology issue. “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,” said the Paytm official.
Asked whether Paytm Payment Bank (like ICICI) was planning to stall payments linked to crypto trades, the Paytm spokesman did not comment. “While investors could withdraw their funds from WazirX into their bank accounts or trade out of money that was left in wallets, hurdles in adding fresh funds to carry on regular trading could impact the growth of the crypto industry in India,” said Gotety.