The government's proposal to ban private cryptocurrencies in India, with certain exceptions, led to massive amounts of panic selling on Tuesday night.

This caused the crash of India's biggest crypto exchange, WazirX.

Nischal Shetty, founder and CEO of WazirX, told Business Today that the WazirX app was restored after the crash, which was caused by heavy user activity following the government's proposed regulation becoming public.

Users took to social media platforms to complain about their inability to sell or buy Bitcoin on WazirX and their money getting stuck during the processing.

Users also flagged the dropping prices of Bitcoin and Ethereum on WazirX and various other Indian exchanges, compared to the values going up on global exchanges.

Can you explain why there is a difference in rates between global cryptocurrencies and the ones listed on the WazirX platform? It is important to clarify this, as investors cannot be left high and dry.

This is why the Government of India is trying to tell people not to invest in private cryptocurrencies.

At 10 am on Wednesday, Bitcoin (BTC) prices on WazirX dropped by 17.

17% to touch Rs 37,78,000, Ethereum (ETH) value in INR declined by 14.

1% to Rs 2,87,773.

Dogecoin was down by 17.

21% to Rs 14,900, whereas WazirX’s own token WRX value declined by 22% to Rs 78.

'We'd like to reiterate that WazirX has an open order book and doesn't determine or control the price of any crypto on the exchange.

There will always be a difference from exchange to exchange, country to country, etc.

, depending on the demand and supply.

For instance, if more people are willing to sell crypto in the INR market instead of the USDT market, you'll see slightly lower crypto prices in the INR market.

Lastly, we also request all our users not to get afraid and panic sell,' the crypto exchange said in a statement.

According to statistics from the Internet Mobile Association of India, the total assets held by Indians in various cryptocurrencies have grown 2X in 2021 to $2 billion, with order volumes spiking exponentially.

Although the government has proposed banning private cryptocurrencies with a few exceptions that allow the usage of the underlying technology, industry stakeholders said that they were hopeful that it would not be a blanket ban unlike the last announcement by the finance ministry and wouldn’t include popular digital tokens like Bitcoin, Ethereum, etc.

Shetty told Business Today that currencies like Bitcoin, Ethereum, and Dogecoin are public cryptos which work on public blockchain technology, hence it remains to be seen whether the bill incorporates these tokens.