Bitcoin has been soaring to new highs over the past weeks and retail traders don’t seem to get enough of the flagship cryptocurrency. While many regret not being able to buy bitcoin below the price tag of $10,000 per coin, customers of crypto trading platform PDAX were briefly able to purchase bitcoin for as low as $6000, due to a “glitch.”
According to reports, an unknown number of customers of the Philippine Digital Assets Exchange, or PDAX, purchased thousands of bitcoin, which dropped as low as 300,000 PHP on PDAX, roughly $6,100, on February 16. As a result, the company had to shut down trading.
“Because of the recent surge in volume, we are experiencing outages, and as a result, PDAX is having to go on a longer maintenance period to ensure that we can scale the platform up and provide better service,” CEO Nichel Gaba told BitPinas in an email.
In a recent press conference, the exchange said this was the result of a technical glitch, and requested those who purchased bitcoin at these prices to return the funds. Many PDAX customers were able to withdraw their funds up to the exchange’s limit on individual accounts of one BTC per 24 hours.
How this happened
Gaba explained that as a result of the surge in trading volume, one unfunded order was able to move into the platform’s order book. As such, an unfunded order was matched with a funded order, resulting in a cascade effect that dropped the price of BTC below reasonable levels.
“Because the buyer was able to purchase assets from an unfunded order, the buyer can then resell the same asset via the order book system, resulting in a chain of transactions, thus the resulting balances of users are a mix of unfunded and funded orders,” he explained.
“It’s very understandable that a lot of users will feel upset they were able to buy what they thought an order was there for Bitcoin at very low prices. But unfortunately, the underlying Bitcoins were never in the possession of the exchange, so there’s never really anything there to be bought or sold,” he added.
The tech glitch resulted in a 36-hour closure, and several users continue to report remaining locked outside of their accounts. Meanwhile, Gaba has noted that only “0.2% are unable to access their accounts” as of February 23.
It has also been reported that PDAX is threatening potential legal action if users fail to turn over the funds.