BitMEX Is Having a Tough Time
Based in Seychelles in Africa, the exchange specializes in bitcoin derivatives and has often been labeled a “bitcoin casino” over the years. The crypto trading platform experienced an outage earlier this week that isn’t sitting well with a lot of bitcoin fans, who say that the company is not reliable, and that any customer who still stores their digital money with the exchange is asking for trouble.
To be fair to BitMEX, it’s not the only trading platform to suffer from such a hit. Recently, Coinbase suffered from not one, but two outages following wild price activity from bitcoin which either caused people to increase their trading or rush to get their money out of the exchange. Ultimately, the platform couldn’t deal with the overload and watched helplessly as its systems came crashing down. Coinbase later had to undergo a period of recuperation before things could potentially be brought back online.
So, why are people okay with Coinbase but attacking BitMEX so voraciously? The latter is currently in the middle of a lawsuit that suggests the exchange may have been involved in bitcoin price manipulation. It also says that the exchange owns billions of dollars in illicit crypto profits. Thus, people’s trust for BitMEX isn’t as strong as it once was, and many analysts are suggesting that traders find another company to engage with.
One such person is Scott Melker, who said in an interview:
I’ve been warning people [about BitMEX] for almost three years, now. I just do not understand why people still trade there.
This Has Been Happening Everywhere
He later added that it was a “horrid” exchange, but again, this has been a long and arduous period for crypto exchanges. Many have suffered at least temporary outages due to the heavy volatility and activity from traders thanks to the ongoing coronavirus pandemic that has caused bitcoin to rise and fall like no other time in its life. Jim Nevotti – president at Chicago-based Sterling Trading Tech – explains:
Unprecedented market volatility and activity during the outbreak have impacted all firms that provide trading technology, effectively being stress tested daily. Market volatility translates into larger amounts of users, activity, and order flow on the platform at the same time. Recent outages experienced by some firms in [the bitcoin and crypto] industry have exposed fault lines in their underlying infrastructure.
BitMEX suffered the outage on Tuesday and says that it is planning to publish a fully detailed report on the incident in the next couple of days. Discussing the recent lawsuit, the exchange issued a statement saying that it’s confident the court will see the situation “for what it is.”