What Happened: The largest crypto exchange in Southeast Asia, Philippines-based PDAX, experienced a technical failure that led to Bitcoin trading at $6,000 – an 88% discount to its current price.
Following the incident, PDAX asked its customers to return their Bitcoins, threatening legal action, a local news outlet Bitpinas has reported.
According to the exchange’s CEO, the system error was not due to a hack but a technical “glitch” caused by a massive surge in trading activity.
Why It Matters: The initial outage is said to have taken place on February 18; however, since then, reports have surfaced on social media of customers being locked out of their exchange accounts and being asked to “return their Bitcoin.”
“After almost 24 hours, they sent me a demand letter and SMS, requesting me to transfer back the BTC, or they “may” be compelled to take legal actions against me.” said one trader who believed his purchase was well within his rights without violating any laws or regulations of the trading platform.
Rafael Padilla, an attorney representing the affected users who are currently locked out of their accounts, commented on the issue on Facebook.
“Our client’s trade transaction was legitimate under applicable laws, decided cases, and of course according to PDAX’s very own terms and conditions/user agreement.”
According to Padilla, PDAX has opted to lock users out of their accounts because it cannot unilaterally reverse the transactions.
An official statement from PDAX claims that 95% of accounts have been restored, but according to the report, many users are still locked out of their accounts.
“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, unfortunately.”, said PDAX CEO Nichel Gaba in a press conference earlier today.
Image: vjkombajn via Pixabay
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