According to Twitter reports, due to market volatility, Coinbase and Kraken systems were limited on November 8. The development follows the earlier disclosure that cryptocurrency exchange Binance seeks to buy competitor FTX.
Twitter users said the services of both exchanges were restricted due to network challenges and unsubstantiated rumours of blocked withdrawals.
BREAKING: Coinbase is DOWN! Several services are down right now.
Now y’all seeing real bear market dealings 🩸🫠
— MASON VERSLUIS 🏆🔮 (@MasonVersluis) November 8, 2022
Coinbase stated that it was experiencing network connectivity difficulties for Coinbase.com, Coinbase Pro, and Coinbase Prime, potentially leading to trouble logging in.
If you’re already logged in, web and mobile app loading times may be sluggish. The issue was brought on by the significant volume of new user registrations and platform transfers on November 8.
We’re currently experiencing network connection issues for https://t.co/ohqDivlp6Y, Coinbase Pro, and Coinbase Prime. This could result in difficulty signing in. If you’re already signed in you may experience slow loading across web and the mobile app.
— Coinbase Support (@CoinbaseSupport) November 8, 2022
Kraken did not comment on the concerns via its public channels but emphasised that it used proof-of-reserves audits and clients could check exchange balances and backed assets.
In an update on its status page late on November 8, Kraken stated that connectivity issues were fixed after a remedy was applied but did not specify what caused the problem.
🚨Check if the exchange you’re using undergoes Proof of Reserves audits.
ICYMI: Kraken is committed to regular audits – enabling you to verify the balances you hold on our exchange are backed by real assets 🤝
Don’t trust, verify your balance now ⤵️
https://t.co/sI0TkgLTHq— Kraken Exchange (@krakenfx) November 8, 2022
With proof-of-reserves, a third party conducts an independent audit to verify a custodian’s reported assets.
It’s also worth noting that the FTX CEO announced on November 8 about the strategic deal with Binance, which intends to purchase FTX after it announced its intention to sell 23 million FTX Tokens, causing market volatility. Some have compared the arrangement to a “chess move,” implying that Binance behaved deliberately and strategically to reach the agreement.
The tweets prompted a sell-off of FTX Token, resulting in the token’s price falling below its support. As of the press time, the token is trading at $5.09, representing a decrease of approximately 76% in the last 24 hours.
Several hours after the deal, the CEO of Binance, Changpeng Zhao, tweeted that the exchange would soon begin employing proof-of-reserves and that “banks operate on fractional reserves. Cryptocurrency exchanges shouldn’t.”