Kraken Blacked Out
The San Francisco based, world's 5th largest cryptocurrency exchange, Kraken blacked out! It is one of the exchanges that the CME group Inc is using to price the bitcoin futures. Kraken went offline on Jan 10th night pacific time for a planned upgrade of its trading software. The upgrade was scheduled for two hours but it stretched for more than 2 days.
The unexpected long time agitated many users, since not only trading but also withdrawals were unavailable for the period, during which coin prices gyrated on bearish news coming out of South Korea.
Infamous 2 days
Nearly all digital currency exchanges have faced significant growing pains in the last year, as the interest in cryptocurrencies has grown exponentially. Coinbase and Bitstamp have been overwhelmed with user traffic, leading to delays. Bitfinex has been hit by DDOS attacks and recently had to stop registration for new users because of overwhelming demand.
However, in case of Kraken it was different. Shutdown which started as a planned 2 hour shutdown for trading software upgrade went for more than 2 days. Kraken said that “an elusive bug” was the cause for holding up the relaunch of the site. In its message, Kraken said that it would resume shortly but all orders had been cancelled. As the maintenance time offline grew to more than two days, Kraken sporadically updated their status page with promises of progress and an explanation of a bug found in the production environment.
Kraken users had already been unhappy with the crypto exchange before the upgrade delay, citing difficulties placing exchanges and frequent connection errors on the site. Finally, at 11:30 Saturday, Kraken's systems were back online, and by 15:47 trading had resumed.
Kraken’s lengthy down time has drawn comparisons to Mt. Gox, a now defunct Bitcoin exchange from which hackers stole 850,000 bitcoin in 2014, an amount now worth about $11.5 billion. It comes even though Kraken has said that funds are safe. Mt. Gox too pressed pause for an extended period of time Feb. 7, 2014. But at the time, the company did not disclose that it had been hacked. Instead, Mt. Gox explained on Feb. 10 that it had gone down due to a flaw in the Bitcoin protocol. It wasn’t until Feb. 24 that customers got a better idea of just how badly things had gone wrong for Mt. Gox, with the company deleting all its Twitter pages. The company eventually revealed the extent of the hack.
In total, kraken was down for more than 44 hours, the longest the website has gone down since its 2013 launch. It was long enough for users to worry, since other exchanges have seen prolonged outage as a prelude to a shutdown or signs of a serious hack.
Solace for Users
To compensate for the anxiety and the lost opportunity cost of the Users, Kraken is waiving off trading fees for all its clients till the end of the month (January 2018). However, the waiver is not applicable for non-margin trades.