Binance Says No Foul Play Involved in Temporary Shutdown
The Binance cryptocurrency exchange temporarily halted trading and withdrawals on Thursday, but assured investors that the shutdown was routine and not related to any attack.
Trading and withdrawal disruptions first emerged around 2:20 GMT, with the company later announcing server issues “due to a significant increase in users and trading activity.” Although the issue seemed routine, Binance later pushed back its timeline for when trading will resume.
An official announcement told traders that full functionality would resume at 2 pm GMT, but later pushed back that target to 4 am GMT Friday.
Company CEO Changpeng Zhao took to Twitter on Thursday to explain the situation:
“We experienced a server issue on our replica database cluster, causing some data to be out of sync. Need to fully resync from master. Due the size of the data, it will take several hours. No data is lost. We appreciate your understanding and support.”
The tweet had nearly 1,700 replies at the time of writing.
The Hong Kong-based firm has been in operation for only a few months, but has already become a top-five exchange in terms of volume. On Thursday, the exchange processed more than $2 billion in transactions, second only to OKEx. Roughly $25.6 billion worth of transactions were posted across all exchanges Thursday, according to data provider CoinMarketCap.
Binance isn’t the only exchange to experience prolonged downtime. Last month, Kraken’s planned two-hour outage turned into two days.
Security Woes Continue to Haunt Exchanges
Market participants are understandably skittish about any disruption to normal trading given the industry’s history of cyberattacks. Since 2014, crypto exchanges and wallet services have lost billions due to cyberattacks. The biggest and most recent example was the theft of 500 million NEM tokens from the Tokyo-based Coincheck exchange. South Korean intelligence services recently informed the public that North Korea may have been responsible for the attack.
A massive theft of bitcoin in 2014 brought down Mt Gox, once the world’s biggest cryptocurrency exchange. Other major exchanges, such as Bitfinex, have also been compromised by sophisticated hackers.
Attacks on service providers are expected to grow as digital currencies appreciate in value. Although the market has undergone a huge correction, coins are still valued at more than $400 billion, a figure that could easily rise should buyers re-enter the market en masse.
Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
Featured image courtesy of Shutterstock.