Crypto.com temporarily blocked all deposits and withdrawals on Sept 21 after suffering a database error that it says some users tried to take advantage of.
Writing on his Twitter account, Crypto.com CEO Kris Marszalek revealed that the platform’s risk systems blocked certain users from making withdrawals after they took advantage of a service outage to manipulate the Ethereum price.
According to him, the outage was caused by an unexplained overnight database error on Sept 21 (Hong Kong time) which is still under investigation. He assured users that the exchange suffered “negligible” financial losses and that deposits and balances are safe and normal service will be restored within 48 hours.
According to Marszalek, the problem began overnight on Sept 21 when an unknown database bug led to a service outage. Some users, he said, tried to take advantage of the situation by manipulating the ETH/USDT price and rapidly selling to other coins in order to lock in massive gains.
The screenshot below shows that ETH was pumped to over $1 million, against its actual price of around $370 at the time.
Marszalek added that the platform’s risk system immediately flagged and blocked the attempted transactions. Shortly afterward, the app went offline altogether and users were presented with an error message when they tried to log in:
Marszalek said that the platform suffered only “negligible” losses during the incident, but the process of putting the exchange back up for users to resume trading is a “complex, time-consuming process” which would require significant downtime. He estimated that users would regain full functionality within 48 hours.
Apology for Service Shutdown
Apologizing to Crypto.com users for the unexpected service outage, Marszalek said:
My apologies to all our users. The team will be on it 24/7 until we are back online. We will learn from this outage and strengthen all systems accordingly. We will be posting regular updates as we get a more accurate timeline to resume trading.
Since he made the comments, users have regained access to the Crypto.com app. At the time of press the exchange was still unavailable.
[Update published Sept 23, 2020] — By the evening of Sept 22, the exchange stated that it was back online and fully operational again. It attempted to assure users by reiterating that “we have rolled back all transactions to a snapshot at 3:45 pm UTC on Sunday 20 September 2020. All funds were kept safe throughout the process.”
Many users voiced concerns over lost staking interest, to which Marszalek noted, “missed soft staking credits will be processed tomorrow (Sept 23).”