Several major cryptocurrency exchanges experienced a number of difficulties during the highly anticipated bitcoin cash distribution that took place yesterday. From 12:20 UTC onward, customers of Kraken and Bittrex experienced several interruptions to login functionality, whilst Bitfinex reported that traders had attempted to manipulate its bitcoin cash distribution coefficient.
The Bitcoin Cash Distribution Resulting in a Flood of Traffic to Several Exchanges
Yesterday’s forking of the bitcoin network and subsequent bitcoin cash distribution comprised the most highly anticipated cryptocurrency event in recent years, with several exchanges experiencing an extreme flood of traffic as traders raced to access their accounts.
Bittrex was the first exchange to complete its bitcoin cash distribution, having taken a snapshot of wallet balances at 12:20 UTC – the time at which the hard fork had been expected to take place. With the 12:20 UTC approximation proving to be an hour premature, a flood of Bittrex customers raced to access their bitcoin cash tokens that did not yet exist. The flood of traffic resulted in many traders being left unable to access their accounts for approximately one hour, whilst Bittrex rushed to re-enable log in functionality.
Kraken also experienced a flood of traffic during the bitcoin cash distribution, resulting in several interruptions to the exchange’s login and trading operations leading up to and after the fork. At 12:45 UTC, Kraken posted that it had identified a number of “performance issues” resulting from “very heavy site traffic heading into the Bitcoin Cash (BCH) fork”, and reminded traders that “BCH account balances and trading will not be enabled until well after the 6th block with a timestamp of 12:20pm UTC or later”. At 13:36 UTC Kraken stated that “Bitcoin Cash (BCH) trading is now live”. This announced proved premature, and likely exacerbated operational difficulties, with the company posting that “BCH balances have not been credited yet. We are still working to credit BCH balances to accounts” just 4 minutes later. At 14:36 UTC Kraken announced it was “still seeing extremely heavy traffic to the site and login functionality is currently down.” Kraken would not complete it’s bitcoin cash distribution for another four hours, experiencing numerous operational difficulties throughout.
Bitfinex Reports to Have Identified Manipulation Attempts by Traders Attempting to Accrue Additional Bitcoin Cash
Bitfinex had a unique policy for their bitcoin cash distribution. According to a statement issued on July 27 by Bitfinex, the exchange would distribute bitcoin cash to “all BTC wallet balances”, and bitcoin lenders. The announcement stated that “Margin longs in BTC/USD and margin shorts in XXX/BTC will not receive BCH” and “Margin shorts in BTC/USD and margin longs in XXX/BTC will not pay BCH”. Due to the methodology employed, Bitfinex anticipated that it may see “a surplus or deficit of BCH”, and would be resolving the “discrepancy in the form of a localized distribution coefficient.”
After the fork had taken place, Bitfinex claimed to have held 101,798.8855 BCH to distribute to 131,237.8562 settled bitcoin wallet balances and -29,438.9707 BCH in unsettled margin positions, resulting in a bitcoin cash distribution coefficient of 0.7757 – however, the coefficient was changed to 0.8539 following “adjustments for manipulation attempts.” Bitfinex stated that “several accounts began large-scale manipulation tactics in an attempt to obtain BCH tokens at the expense of exchange longs and lenders of the platform, causing the distribution coefficient to artificially plummet.” Bitfinex has stated that those who attempted to execute “this kind of manipulation” were in “violation of Bitfinex’s terms of services” and have been “sanctioned accordingly”.
Did you experience any difficulties accessing exchanges during the bitcoin fork? Share your experience in the comments section below!
Images courtesy of Shutterstock and Bitfinex
Need to calculate your bitcoin holdings? Check our tools section.
Use Bitcoin and Bitcoin Cash to play online casino games here.