BitMEX’s downtime on 19 May solely a hardware issue or something more suspicious?
The rise and fall of Bitcoin have been associated with many factors and one of them involved the impact whales have had on the market. In the past few months, the BTC market saw three major dumps, causing the price of the coin to dip drastically within hours. The recent 20 May dump was due to another panic in the market over the movement of 40 BTC from a probable Satoshi address to another address. However, hours before the panic-jitters spread through the market, BitMEX went down.
However, such incidents do take place with exchanges as they work 24×7 and are still perfecting service and security, however, the timing of this was rather strange. The last time such a shut-down took place was earlier in March, on the very day BTC’s price was slashed by more than half. At the time, BitMEX liquidated a massive $1.2 billion worth of long contracts on its platform alone, which was one of the largest long squeezes in the history of crypto.
BitMEX called it a hardware issue initially and later confirmed a DDoS attack on its platform. However, maker speculators were not convinced and thought it was a deliberate manipulation. Fast forward, to 19 May, still healing from the attack, BitMEX’s trading engine server restarted twice between 12:00 UTC and 13:40 UTC. According to its latest post-mortem report:
“At 12:41 UTC, our cloud provider confirmed that both server restarts were associated with underlying hardware issues.”
Another hardware issue was cited hours before the fall of BTC. However, the engineers were able to get the system up by 13:40 UTC. Bitcoin price fell, triggering $40 million longs in liquidation on the exchange.
Between the two incidents, BitMEX was motivated to secure its platform and had conducted an infrastructural update on May 14. This update replaced the technology behind its primary database, and improved its recovery time by four times, while opening opportunities to scale it 15x over the next few months, without interrupting trading.
With consecutive errors in providing smooth service to its customers, BitMEX began losing BTC held on its platform and has now become an exchange formerly known to be the largest bitcoin derivatives exchange.