Fear, uncertainty, doubt: the FUD reality of crypto users

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Gopal Somani, a 26-year-old Delhi-based clothing exporter and part-time crypto trader, spent Tuesday evening desperately trying to sell part of his cryptocurrency wallet, but transactions failed. He couldn’t even buy more coins because the wallet didn’t add money. The panic sale was triggered after a government bulletin announced that a crypto bill would be introduced in the winter session of Parliament and that “all private cryptocurrencies would be banned.”

“It was a frustrating evening; the price fluctuated so much. I was trying to sell some coins and buy a few to average but couldn’t do it. There was a problem with the MobiKwik wallet and it lasted until Wednesday. the prices went up the next day and I lost because I couldn’t trade, ”he said.

The Wazir X app crashed for a while due to high transaction volumes and its CEO Nischal Shetty had to tweet that the exchange was experiencing delays and was working on fixing the issue.

Meanwhile, thousands of panicked small investors found themselves staring at their screens, and some expressed frustration by letting off steam on Twitter. This is what crypto slang describes as a time of fear, uncertainty and doubt.

Industry experts say users at the biggest exchanges – Wazir X, Coin DCX, and CoinSwitch Kuber, among others – have witnessed delays in transactions and encountered payment issues.

“The sell-off that occurred earlier in the week occurred in some of India’s largest crypto exchanges. Transfers from some of India’s largest crypto exchanges had temporarily stopped working. Cryptos with the exchange pair against the Indian rupee have been hit the hardest, but Mudrex hasn’t seen any notable sell-off, ”said Edul Patel, CEO and co-founder of Mudrex.

Small crypto investors say major exchanges facing problems on high trading days are becoming a recurring problem.

“It’s a trend now. Whenever trades are high, trade collapses or trades don’t. The CEO tweets that we are fixing the issues. But my question is, why is this happening- it over and over again? ”says Vishal Gupta, a Noida-based investor and popular crypto commentator.

Social media is littered with user complaints about broken deals, out-of-date charts, frequent issues with wallets, bank channel changes, and KYC-related issues.

Earlier in September, when China’s central bank announced that all transactions involving cryptocurrencies were illegal, users encountered similar business problems.

A few smart investors have already started to take their risks. Vikas Jaiswal, a Kolkata-based real estate developer who enjoys getting into crypto, says, “Now I operate four accounts: CoinDCX, CoinSwitch Kuber, Wazir X and Vauld. So if something goes wrong, I can quickly switch between different accounts and don’t miss out on any opportunities. Also, not all exchanges have all the coins that I want to trade, ”he said.

At 2 p.m. on Friday, Gujarat-based crypto trader Abhishek Panchal tweeted a screenshot of major crypto currencies like Decentraland, Enjin and Bitcoin showing an abnormal price change on Wazir X due to a bug. “The problem was corrected after a while. I quickly tweeted to let other people know there was a problem,” Panchal told ET.

There are a growing number of people who are saying that exchanges should be penalized for not closing trades or should be regulated like stocks so that small investors don’t lose money. “Sebi is launching an investigation if people are losing money in stocks because of website problems. There are remedies. Where do small crypto investors go? Gupta said.

Wazir X CEO Nischal Shetty did not respond to the ET messages, and CoinDCX did not respond to the ET questionnaire.

With limited information from the exchanges, the market is rife with unfounded rumors: the exchanges slow down trading to prevent massive sales; the exchanges manipulate the markets, the exchanges actively participate in trade, etc.

Since March, exchanges have experienced unprecedented growth and most of the new users are young and from small towns in India, with limited knowledge of the asset class, often drawn to high-tension advertising campaigns featuring celebrities. . They tend to panic more, especially when there is unfavorable news. “Crypto has caught the attention of small investors because it allows people with 25,000 to 30,000 yen to have a chance to become a lakhpati. It’s a big thing in the backcountry. The government and the stock exchanges have a duty to safeguard their investments, “Gupta said.

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