India’s second-largest bitcoin trading platform CoinDCX witnessed a major technical outage on December 1, 2024, in the PeiPei/INR market which caused some major chaos on the platform. The network error resulted in the platform’s matching system being unable to accept new passive sell orders on PeiPei tokens, causing traders to lose a lot of money because of erratic pricing behavior. As a result, the exchange came to the head repeatedly and resolved the problem by 6 AM the following day, with the company members working all night.
This was confirmed by Neeraj Khandelwal, the CEO of CoinDCX, who posted on Twitter that “abnormal exchange behaviors” exist and that systems were ‘calmed down.’ Khandelwal stated in the Twitter posts that they are working to strengthen their systems further to avoid such incidents in the future and thanked the community for assisting them in further progress by explaining why several support tickets remained.
Coindcx faced an issue yesterday in the PeiPei/INR market. There was a technical glitch that led to market behaving abnormally. Mainly, the matching engine stopped accepting new sell orders for the pair when the systems detected abnormal behaviors.
— Neeraj Khandelwal (@neerajKh_) December 1, 2024
Our team was working till 6AM…
While the company moved quite fast in putting out the brushes, a fair number of users were not happy. They complained of losses up to ninety percent of what they had before the breach.
Users Express Frustration and Discontent
The people have raised an alarm regarding certain operational issues despite promises made by CoinDCX to resolve the issue in a ‘transparent’ manner while expecting some form of compensation in the days to come. Some people lost a lot of money such as the user Prathap Sripathi who would later claim he was met with ‘sorry excuses’, contributing to the increasing number of voices expressing outrage on the subject matter.
I lost my money about 48k for the same reason, bought at higher price and while it was not taking for the price listed there, then the price acted abnormally and led to loss total investment. What you gonna do about that?
— Prathap Sripathi (@SripathiPr4145) December 1, 2024
Just saying looking into it and useless excuses?? pic.twitter.com/J0jgshxorv
The rest of the audience also expressed their anger. The handle @Rachit_Patel1 reported that they lost all of their faith in Coin DCX:
What about the money which is showing now -97% loss. We guys trusted on you and you guys looted our money just saying that was glitch.
— Rachit Patel (@Rachit_Patel1) December 1, 2024
There were even members who raised eyebrows regarding the order in which the platform was targeted claiming:
“Why was it only your opportunity to sell Peipei tokens when the glitches came into play?”
This has added to the narrative that there was chronic technical trouble within the entire sell orders on the platform because some feel that there was much more intended from CoinDCX.
Trust and Accountability at Stake
Following the tumultuous events that transpired, the disappointment and the resignation are still lingering. But can the damage, the loss of CoinDCX clients’ funds, and their loyalty be repaired? On the legal side of things, the breach of trust is most severe however, it is not the only area of concern. Roushan Bhaskar, a user in the CoinDCX community says:
Stability and trust are key factors for us investors, so it’s great to see them prioritizing that.
— Roushan Bhaskar | Desi Crypto (@bhaskarroushan) December 1, 2024
Another user @SayedSa73565683 said:
@neerajKh_ Why Glitch only for selling y not for Buying ? Pls Don't make any Excuses U guys Printed hell.lot of money with Fake Peipei coin And with there team We Blindly Trusted Coindcx and recommend to others Going further we will remove it and Move it Different exchange
— Saif (@SayedSa73565683) December 1, 2024
As these and other sentiments are dominated by tremendous frustration, some users are in fact looking forward to leaving CoinDCX or searching for other clients that provide the same services but with lower risks and a high degree of reliability.
This fuel of hope allows many who trade including the users of CoinDCX, to rethink their positions. Asking about his position, a user RS Srinivas wrote:
With this episode, my confidence over Indian CEX is completely off , Using Web3 wallet and converting crypto into INR through onramp is the only way to get peace of mind
— RS Srinivas (@saisreenu35) December 1, 2024
Their trust has been abused and now several others have begun looking at Web3 and DEX trading.
The Road Ahead: CoinDCX Promises to Return User Funds
A user @PlayzzzRon49131 shows his concern and writes:
Sir It's been quite sometime since the PeiPei issue occured, I just wanted to know when will the issue be solved and will we be refunded the money invested by us on PeiPei?
— RoninPlayzzz (@PlayzzzRon49131) December 2, 2024
The consequences of this bug have the potential to be quite adverse, not only on CoinDCX but even on the Indian cryptocurrency market as it is still a work in progress in terms of creating a trustworthy image. @Beliver369 summed up the discussion with a thought-provoking tweet, highlighting trust issues with the growing Indian crypto market:
Remember when u guys delisted Bonk token before it surged to almost 10k percent still same shit Indians should never ever trust Indian exchanges to buy and hold meme tokens.
— NV (@Beliver369) December 1, 2024
Thankfully, CoinDCX reverted to users after four days, stating that all user funds will be reverted back to them.
CoinDCX has provided clarity today on December 5 – after a good five days – regarding the $PEIPEI-INR token issue, which arose due to a technical glitch in the matching engine. The token listed, $PEIPEI (ETH), was verified as correct.
The glitch, according to CoindDCX, occurred on November 29, caused disruptions in placing orders and led to abnormal price inflation due to low liquidity. Circuit limits were introduced on November 30 to stabilize the market, and additional measures were implemented on December 1 to restore normal trading.
The incident primarily affected $PEIPEI-INR trading and did not impact other crypto assets on the platform. CoinDCX has identified the affected users and is compensating them for financial losses, with funds provided from its reserves. The company says that any compensation is expected to be completed within 72 hours. The platform acknowledges the inherent risks associated with small-cap tokens and is working on enhanced safeguards to prevent similar issues in the future.
CoinDCX Glitch: A Wake-Up Call for India’s Crypto Trust?
The technical issue that arose at CoinDCX demonstrated once more that trust in the cryptocurrency market is a tenuous thing. Even as the industry develops, exchanges can’t only focus on new growth areas and novel products; they need well-functioning systems and openness.
As for the Indian crypto exchanges, the community will provide the blueprint for navigating the storm: if lessons are learned from this debacle, there is room to rehabilitate the entire construct. However, when transparency and responsibility are not embraced, CoinDCX and the rest will not only lose a fraction of their market share but the trust that is at the cornerstone of every financial system.
Last Updated on by Icy Tales Team
