Korean exchange Bithumb, the world’s largest cryptocurrency exchange by trading volume, has pointed to an unexpected surge in transaction- and user-volumes leading to a server outage over the weekend.
Seoul-based Bithumb has explained the cause of a server failure during the weekend, wherein users were unable to make withdrawals nor deposits for a little under two hours on Sunday evening. Data from Coinhills reveals Bithumb as the world’s largest cryptocurrency exchange by trading volume, totaling nearly 18% of the overall global trading.
Offering its apology to disgruntled customers, the exchange blamed the soaring successes of bitcoin’s offshoot bitcoin cash (BCH) over the weekend. Bitcoin cash value spiked in recent days following the cancellation of the Segwit2x hard fork, fueling investor interest.
In a post on its website, Bithumb revealed 24-hour trading volume leading up to the outage reached 800%-900% to that of October’s average. The number of concurrent users on the website grew a staggering 1600-1700% compared to the previous day’s average, leading to internet connections rising up to 3 Gbps in bandwidth, over 500% of the previous average. All of which led to unprecedented traffic that crippled Bithumb’s servers, akin to a DDoS attack. Major bitcoin exchanges like US-based Coinbase and Kraken have also suffered similar outages during times of volatility.
Notably, Bithumb confirmed the cancellation of a number of pending transactions to minimize damages borne out of volatility during its server outage.
The market prices of some virtual currencies fluctuated up to 30% and users were expected to suffer damages. Therefore, in order to stabilize the transactions and minimize the damages, we cancelled pending transactions that happened prior to the service check [outage] by the lump.
Bithumb went on to reveal talks with law firms in order to determine compensation payouts to users who suffered losses. “As soon as the compensation plan is confirmed, we will make a quick announcement,” Bithumb added.
Earlier this year, the Korean exchange promised to compensate users for monetary losses following a sweeping data breach due to a phishing attack targeting employees’ computers.
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Last modified: May 20, 2020 9:48 PM UTC