Kraken and Gate Crypto Exchanges Suffer Asset Withdrawal Downtime
On November 2, 2023, the crypto community was sent into a frenzy as two major crypto exchanges, Kraken and Gate, encountered unanticipated withdrawal disruptions. These events are a stark reminder of the critical role secure crypto storage plays in the digital age and the necessity for users to stay vigilant and well-informed in this ever-changing crypto landscape.
Kraken, a well-known cryptocurrency exchange, experienced a 40-minute withdrawal freeze, rendering users temporarily unable to access their digital assets. Thankfully, the company acted quickly, reporting that a fix had been implemented and that normal service had been restored. This glitch almost coincided with scheduled maintenance at 08:00 UTC, raising concerns about a possible connection.
Gate’s Prolonged Withdrawal Downtime
Simultaneously, Gate, another popular cryptocurrency exchange, experienced a longer withdrawal outage. Many users’ crypto withdrawals stopped for a shocking six-hour period due to an unspecified technical issue.
While crypto exchanges such as Kraken and Gate provide convenience and access to a diverse range of cryptocurrencies, they pose potential security risks. These events highlight the inherent risk of storing cryptocurrency assets on exchanges. When deciding where to store their digital assets, users must consider these risks.
However, Kraken, in particular, has been working hard to expand its global presence. Bivu Das was recently appointed as the company’s new managing director for its operations in the United Kingdom. This strategic move demonstrates Kraken’s commitment to establishing a strong presence in the United Kingdom, a key market for the exchange.
“Kraken has long advocated for the potential crypto assets to transform how everyday people interact with financial services,” said Das.
Some of the Outages Faced by CEX’s
On March 24, Binance suffered a two-hour spot market outage due to a software bug related to the trailing stop loss feature. On October 25, Binance experienced a temporary outage of crypto withdrawals due to a “technical issue.”
Other crypto exchanges that have experienced outages in 2023 include:
- Gemini (seven-hour outage in December 2022)
- Coinbase (outage after an advertisement was shown at the Super Bowl in February 2023)
During periods of trading volatility, cryptocurrency exchanges are frequently experiencing downtime. This is because they must be able to handle a large volume of transactions quickly and efficiently. However, even minor technical issues can cause outages, which can devastate users.
In addition to outages, crypto exchanges are vulnerable to disruptions, such as cyberattacks and regulatory scrutiny. For example, the US Securities and Exchange Commission (SEC) investigated Binance in March 2023. As a result, some users withdrew their funds from the exchange, contributing to the outage on March 24.
The cryptocurrency industry has seen several crypto exchange withdrawal disruptions. While many of these resulted from security flaws and bear market trends, exit scams, poor administration, and financial mismanagement played a role. Every crypto exchange failure highlights the importance of decentralized finance while also demonstrating the flaws in our traditional centralized financial models.
In a rapidly changing crypto landscape, the events of November 2, 2023, highlight the importance of users prioritizing security, even when dealing with well-established exchanges. In the case of centralized exchanges, it is obvious that a proper regulatory framework is required to protect users from such mishaps in the future. Furthermore, by using cryptocurrency wallets, investors and traders can ensure the security of their funds.