On Sunday (April 4), WazirX which prides itself as one of the largest cryptocurrency exchanges serving Indian customers crashed due to excess traffic. The platform witnessed a business volume of $270 million in 24 hours before the site crashed. This was for the first time that WazirX, which was founded in 2018 and taken over by Binance in 2019, witnessed a trading volume of $200 million.
As the news spread across the crypto community and the platform continued to face outages and downtime, the platform witnessed another milestone when it reported trading to the tune of $350 million on the next day April 5, 2021.
WazirX CEO Nischal Shetty was quoted by Mint as saying, “We have scaling systems in place, which start creating new server instances to accommodate new users. To create new servers, our scaling system relies on several components, one of which is provided by a third-party service provider. Due to unprecedented traffic, we hit an internal rate limit with our service provider, leading to failure in creating new servers, and choking of our existing servers.”
Shetty says his crypto exchange platform is on track to generate $1 billion worth of trading every day by the end of this year provided the proposed ban on cryptocurrencies in India does not become a reality. If WazirX does achieve this milestone, it will be India’s first crypto unicorn.
Earlier, the central government was reported by Reuters to have been planning to ban cryptocurrencies in India and penalize miners, among others in the crypto ecosystem. However, the government has refrained from taking a tough stand on the issue.
Rather, it made it compulsory for crypto-asset holders – companies and individuals – to disclose their holdings, transactions, profits, and losses. The move is being seen by the industry as a step towards regulating the cryptocurrency market. India is said to have about 10 million people active in the crypto trade and their total investment in cryptocurrencies is about $1.5 billion.
The unprecedented rush to WazirX that led to the site crashing is a clear indicator that cryptocurrencies have not lost their attractiveness despite the discordant noises from different sources including the government.
The skepticism about the government’s stance towards digital coins stems from an RBI circular on April 6, 2018, that barred RBI-regulated banks from offering banking services to any crypto exchanges, assets, transactions, and so on. However, the Supreme Court of India on March 4, 2020, set aside the RBI circular, paving way for normal crypto trade in the country.