Southeast Asia’s leading cryptocurrency exchange is blaming a technical glitch for the worth of Bitcoin dropping right down to 300,000 PHP, roughly $6,100 USD, earlier on 16th Feb.
An anonymous number of users of the PDAX [Philippine Digital Assets Exchange], managed to purchase thousands of BTC from the exchange at a huge discount, making them native currency billionaires on paper – within a couple of hours.
A number of PDAX users withdrew their purchased Bitcoin, up to the exchange’s limit on individual accounts of 1 BTC per 24 hours. PDAX is reportedly demanding these users refund BTC obtained within the crash under the threat of potential action.
The technical glitch led to a 36-hour closure, and a number of other users still report remaining locked outside of their accounts.
One user, who managed to get Bitcoin when it dropped to 300,000 PHP from 2.4 Mln PHP, took to Reddit to invite opinions on whether or not they’re legally required to return the Bitcoin, receiving an outpouring of mixed responses.
“I managed to transfer the purchased BTC to a different wallet outside PDAX just before they closed the trading and eventually the website,” the Redditor explained within a thread on r/phinvest.
“After almost 24 hours, they sent me a requirement letter and SMS, requesting me to transfer back the Bitcoin [BTC], that was brought well within my rights without violating any laws or regulations of the trading platform, or they may be compelled to require legit actions against me.”
Earlier on 23rd Feb., PDAX CEO Nichel Gaba held a conference to further clarify what had happened within the week earlier. He added that the burden placed on the exchange by a flurry of unanticipated activity had introduced a glitch & permitted an unfunded order to be matched with a funded order. Consistent with Gaba, this led to a cascade effect that dropped the worth of BTC below reasonable levels.
“It’s very understandable that several users will feel upset they were able to purchase what they thought an order was there for Bitcoin at very low prices. But unfortunately, the underlying Bitcoins were never within the possession of the exchange, so there’s never really anything there to be bought or sold.”
Gaba explained that of all the exchange’s users, solely “0.2% were able to access their accounts” as of 23rd Feb.
Founded earlier in 2019, PDAX is licensed to work as an exchange by the Philippines financial institution. The exchange’s 16th Feb. closure occurred within a pivotal moment in Bitcoin’s history as its price soared above $50k for the primary time.
PDAX isn’t alone in its challenge of growing to satisfy the demand of its users, as Coinbase and Binance also suffered service outages this year.