- Coinbase just caused a frenzy in the market yesterday when its systems crashed amid the rallying Bitcoin (BTC) and altcoin prices.
- Company CEO Brian Armstrong blamed the incident on a “large surge of traffic.”
- The crypto exchange had everything restored a couple of hours ago.
What Happened Yesterday
Coinbase was swamped with complaints due to users seeing zero balances in their accounts and having problems trading at around Wednesday morning Pacific Standard Time. The support team of the cryptocurrency exchange immediately acknowledged the issue and assured users that their accounts and funds were safe.
Likewise, the company guaranteed that they launched an investigation of the matter. An hour before the crash, the Coinbase Status page already began posting an update about Ethereum (ETH) users having trouble with their transactions.
Coinbase CEO Brian Armstrong also went to X in order to help quell the worries of customers. During that time, he stated that the “large surge of traffic” flooded their network, which caused the crash.
By evening, Coinbase informed users that their systems were up but a few customers may still see inaccurate balances in their accounts. Later on, the crypto exchange claimed it was business as usual and the display issues have been resolved.
Coinbase CEO’s Explanation for the Crash
Following the restoration of Coinbase’s services, Armstrong admitted that the traffic exceeded the capacity of their network in a way they didn’t expect.
“We had modeled a ~10x surge in traffic and load tested it,” the CEO explained. “This exceeded that number.”
The next line, however, drew some criticisms online. He added, “It’s expensive to keep services over-provisioned, but we’ll need to keep working on auto-scaling solutions, and killing any remaining bottlenecks.”
One commenter chided Armstrong for his lack of foresight as a crypto custody provider and for skimping on over-provisioning to prepare them for such a scenario. Another pointed out that Coinbase is already charging high fees for users, so it should be out of the question.
Furthermore, several users chastised the company for ruining what could have been a good trading day for them. Of course, some came up with the customary conspiracy theory that Coinbase may have intentionally tried to sabotage the market to reap some profits out of the ensuing chaos.
The Coinbase crash coincided with the day Bitcoin took off on a three-year high near $64K and Ether was also trading at its two-year top around $3,500, which added to the chagrin of the users and FUD in the market.