Coinbase Witnesses Major Outage Amidst Continued Crypto Bloodbath

Coinbase Witnesses Major Outage Amidst Continued Crypto Bloodbath

Cryptocurrency exchange Coinbase has reported experiencing a major outage amid falling crypto prices. Users of the exchange complained about difficulties in withdrawing their funds which had caused a wave of panic among investors.

Coinbase said they are working on the issue and the funds are safe. He also added in a Tweeter, “We are seeing a recovery following the implementation of a fix, but our teams continue to monitor the situation.” Social media platforms such as Reddit have been inundated with queries about Coinbase experiencing downtime.

The main concerns were with withdrawals, as huge sums of money had been stuck in Coinbase users’ accounts for a long time. However, some users have reported the problem of not being able to access the app or the website at all.

Coinbase users have expressed concerns about the difficulty of making a “quick trade” in the midst of an intense bear market. With Bitcoin losing its value by almost 25% and with continued market weakness, the need for fast transactions and withdrawals has increased.

Coinbase has been going through some choppy times lately

Coinbase recently announced a net loss of $430 million in the first quarter, based on declining sales and active users. The decline in revenue is directly related to falling transaction volumes and a 19% drop in monthly users compared to the fourth quarter.

The network outage came in the wake of the bankruptcy scare that users had previously misunderstood from Coinbase’s quarterly earnings disclosure. Coinbase had mentioned that it held $256 billion in fiat currencies and cryptocurrencies on behalf of its customers.

In the event of bankruptcy, account holders will be considered unsecured creditors, which means that users will lose their money in the event of business insolvency. This part of the disclosure was addressed by the CEO of Coinbase in a series of tweets.

He said the disclosure was provided with US Securities and Exchange Commission (SEC) requirements in mind and that the exchange was not at risk of bankruptcy. Users, however, have also been affected by the decline in Coinbase stock value.

Related Reading | Coinbase CEO Says ‘Informal Pressure’ From RBI Has Disrupted Our Payments

Rigid wallet The way forward?

Shortly after the CEO of Coinbase clarified the bankruptcy conjecture, the exchange faced an outage. Twitter users, however, expressed distrust of keeping money locked up in a crypto exchange.

In the event of bankruptcy, the exchange is likely to use users’ money to bail itself out. This idea of ​​losing money due to bankruptcy sent jitters through the crypto exchange’s user base.

This is when many Twitter users came up with the idea of ​​moving their cryptocurrencies to a hard wallet or hardware wallet.

A hardware wallet will store the user’s private keys in a secure hardware device.

This will then allow owners to gain access to their funds using a password or seed phrase, these wallets are a powerful feature of personal safekeeping.

News of the outage came as Binance, the world’s largest crypto exchange, suspended Terraform Labs’ Terra (Luna) and TerraUSD (UST) tokens, which plunged 98% and depleted the savings of a lives of many investors.

Related Reading | Coinbase CEO Clarifies Bankruptcy Risk

Coinbase
Bitcoin was priced at $29,900 on the 1-day chart | Source: BTCUSD on TradingView
Featured image from UnSplash, chart from TradingView.com

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