BitMEX under fire for going offline as Bitcoin crashed to $3,700

on Mar 14, 2020
  • Major crypto exchange, BitMEX, went offline on March 12th for nearly half an hour before returning, just as BTC was seeing its largest sudden drop in years.
  • The community immediately started speculating as to what was the cause of the incident, and accusing BitMEX of foul play.
  • The exchange continues to deny any 'conspiracy theories,' claiming that the reason behind the crash was a hardware problem with its cloud provider.

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Cryptocurrency trading giant, BitMEX, recently became the center of the attention of the angry crypto community after unexpected downtime. The platform went online in the evening of March 12th, sparking various rumors of foul play, while Bitcoin price kept dropping, eventually hitting $3,700 before recovery took it to $5,500.

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The company explained the event in a tweet, stating that it had hardware problems as frenzied trading became too much for the firm’s cloud provider to handle.

After going offline, BitMEX did not return for around 25 minutes, and the issue was addressed by 3 am UTC. The entire development took many in the cryptocurrency community by surprise, although it is difficult to understand why the platform had briefly crashed, considering that it saw more liquidation than any other day in the past year.

Recent reports also show that aggregate volumes for Bitcoin futures also broke past records.

BitMEX responds to rumors, calling them ‘conspiracy theories’

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As mentioned, the community quickly started producing various rumors regarding the incident, speculating what happened, and accusing BitMEX of foul play. Many have experienced heavy losses, but the exchange continues to reject any conspiracy theories and wild rumors.

Some rumors are even claiming that the exchange itself had a hand in BTC/USD record losses. Meanwhile, others have made different assumptions, such as CEO of the research outfit Alameda, Sam Bankman-Fried, who also owns the competitor exchange, FTX. He believes that the reason behind the exchange’s crash was an unwillingness to address market conditions which hastened the drop of BTC price.

However, he also proposed an “insane theory of the day,” speculating that BitMEX may not have had hardware issues at all.

BitMEX staff wrote back, saying that Bankman-Fried was right about calling such conspiracy theories ‘insane,’ eventually causing Bankman-Fried to admit that he believes the exchange’s arguments.