TL;DR Breakdown
- Technical error allows PDAX users to buy Bitcoin at discounted rate.
- Exchange threatens lawsuit if users do not refund acquired discounted coins.
One of Asia’s biggest crypto exchange, PDAX, is currently at loggerhead with its users who bought Bitcoin for $6,000 during a technical glitch.
PDAX exchange said the glitch led to Bitcoin price temporarily falling by 88 percent on the platform and trading suspended afterward in a press conference. When BTC price dropped on the exchange, some users easily bought Bitcoin for themselves at $6,000.
These users bought thousand of BTC from the exchange at a massive discount. Some other users withdrew their purchased Bitcoin up to the exchange’s limit on individual accounts of one BTC per 24 hours.
However, the exchange firm is demanding that the users refund BTC obtained during the crash under the threat of potential legal action. While the technical glitch occurred, trading was suspended for 36 hours as several worried users continued to complain and report being blocked from accessing their accounts.
What happened to PDAX?
Reportedly, on the 16th of February, a whale sold his Bitcoin on PDAX in exchange for Philippine pesos. According to descriptions of platform users that day, the total dump was worth more than $5.3 billion or P257 billion worth of Bitcoins.
However, the whale made a mistake in selling each bitcoin for P300,000 instead of more than P2.5 million, which was its price that weekend when the cryptocurrency was at an all-time high at more than $50,000 per Bitcoin. One investor said the platform gave no clear explanation for the days-long interruption.
“They just said it was a system maintenance,” @mikel_pangan told Interaksyon. “It was only available for a concise period after the 36-hour fix they mentioned. We cannot cash out, even if they reversed the [Bitcoin] purchase.”
Outage becomes normal with crypto exchanges
During the press conference, PDAX CEO Nichel Gaba said what happened was because of a burden placed on the exchange by a flurry of unanticipated activity, which introduced a glitch and allowed an unfunded order to be matched with a funded order.
The CEO said it led to a cascade effect that dropped the price of BTC below reasonable levels.Users of the exchange were also shut out of the platform over the weekend during a pivotal moment in Bitcoin as the price surged above $50k for the first time.
Outage during Bitcoin price surge is fast becoming a normal thing as leading exchanges such as Coinbase and Binance also suffered a service outage severally as they try to meet their users’ demands. Coinbase is mainly prone to outages during a slight surge in Bitcoin price.
