Risks of working with cryptocurrency exchanges.
Coinbase, the largest US cryptocurrency exchange, was unavailable to traders for the second time in the last month. This happened during the fall of Bitcoin from $ 9,500 to $ 8,100 a couple of days ago.
That is, the scheme is as follows. As soon as the cryptocurrency exchange rate rises or falls sharply, users run to the exchange to conduct transactions, and the exchange eventually drops - it goes offline. Accordingly, its users cannot do anything with their coins. But if, for example, the value of a coin increases sharply, the trader is unable to sell his stocks and make a profit. That is, in fact, any malfunction in the operation of the exchange is equal to thousands of lost or lost dollars of its customers. And this is at least inconvenient.
Coinbase received many angry reviews on Reddit. For example, here is one of the comments from a trader under the nickname Soorena.
I used COINBASE for many years and noticed that with sharp movements in asset prices, trade “falls” and becomes unavailable for some time. I won’t be surprised if someone sues Coinbase for this.
Indeed, at the same Reddit, users regularly share screenshots of the idle Coinbase exchange when the rate changes. Usually the site gives an error message - and nothing can be done about it. The platform only offers to leave a message about the bug. That's just to get access to your coins after that, as before, it will not work. We'll have to wait until the developers bring the platform to its senses.
By the way, the mentioned error message looks like this.
Recall that in April Coinbase temporarily stopped processing requests from traders when the price of Bitcoin jumped 15 percent. Here is a quote from another user who got into an awkward situation.
I am confused: exchanges such as BITMEX and Coinbase still cannot cope with the volatility of Bitcoin even after six years of operation.
Sam Bankman-Fried, executive director of the FTX trading platform, suspects that so-called market makers may be causing such problems. These are traders or firms that have a large amount of funds and constantly make transactions on the exchange to support liquidity. That is, thanks to them, platforms can perform operations with huge volumes, since the mentioned market makers provide them with them. Here is a quote from Sam.
It is worth noting that market makers can place more orders [in the event of a price spurt] than before, loading the exchange server.
Remember: transferring funds to the exchange, you de facto lose them, because in the event of a serious technical problem, it is unlikely that anyone will return the cryptocurrency to you. Sometimes this happens - as in the case of BitMEX - however, in this case, the cause of the activity of the exchange employees was the mass messages of dissatisfied users on the Internet.
