By Shalini Nagarajan / October 3, 2022, 4:37 am EDT
- Coinbase experienced issues with the electronic system that facilitates online US bank transfers
- Prominent blockchain Solana also suffered hours-long downtime over the weekend
Coinbase has reassured users that all funds are safe after the exchange was unable to process US bank transactions for nearly six hours over the weekend.
Account holders with US bank accounts found they couldn’t make withdrawals or payments on Coinbase from 6:57 am ET to 12:41 pm ET on Sunday.
The company identified the issue as a snag with the Automated Clearing House (ACH) system, the electronic network that facilitates online transfers between US banks.
Users in the US were not completely blocked from buying crypto, as they could still use a debit card or PayPal account. But cash withdrawals were fully frozen during the outage.
Coinbase says more than 103 million people around the world use its platform, but it isn’t clear how many hold US bank accounts. A spokesperson didn’t return Blockworks’ request for comment by press time.
The top US exchange is among the largest in the world, with trading volumes of around $966 million in the last 24 hours, CoinGecko data shows.
ACH snags may still be the least of Coinbase’s troubles. Its share price fell more than 9% on Thursday after Wells Fargo issued a profitability warning about the company.
Rising competition from Binance and FTX will pressure the firm and eat into its market share, equity analysts Jeff Cantrell, Amid Patel and Griffin MacMaster wrote in a note seen by Blockworks.
Given recent discussion from the SEC regarding “cryptos as securities” (such as for staked assets), regulation will be a particular challenge for the company, they added.
Coinbase is trading 2.3% lower in Monday’s pre-market session at $63 per share, down 75% in the year to date, according to TradingView data.
Coinbase bank difficulties in tandem with Solana downtime
Coinbase’s trouble with the US banking system wasn’t the only outage event this weekend.
Prominent blockchain Solana stopped processing transactions due to a glitch that caused about six hours of interrupted service on Saturday morning.
The downtime affected DeFi apps across the Solana ecosystem, as many rely on constant connection with protocols throughout the crypto landscape, particularly price oracles.
Chain watchers noted that decentralized trading protocol Mango Markets was unable to handle liquidations or receive margin deposits until the issue was resolved — affecting at least one sizable long contract worth almost $2.5 million.
Solana has been down for nearly 5h, and validators are currently coordinating an attempt to restart. There is a long contract with nearly 2.5m in the Mango market that is in the liquidation range. However, the holder can neither add margin nor liquidate. https://t.co/ppVjFaJ2pe
— Wu Blockchain (@WuBlockchain) October 1, 2022
Solana validators eventually coordinated to restart the network, which has suffered at least 12 significant outages so far in 2022, according to its incident history.
The price of Solana’s native token, SOL, was mostly unaffected by the incident, having lost around 3% over the weekend, more-or-less in line with the rest of the digital asset market.
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Shalini is a crypto reporter from Bangalore, India who covers developments in the market, regulation, market structure, and advice from institutional experts. Prior to Blockworks, she worked as a markets reporter at Insider and a correspondent at Reuters News. She holds some bitcoin and ether. Reach her at [email protected]
