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Comment by dopamean | Hacker News Reader

> "Investigating - All buys and sells have been temporarily disabled. We are working on a fix and apologize for any inconvenience," Coinbase said on its status website at 11:11 a.m., ET.

What exactly is broken that needs to be fixed? Is there just a ton of trading volume and their system cant keep up ?

Edit:

I ask because the headline just says that prices are falling quickly and so Coinbase halted trading. This sounds a lot like a circuit breaker but then you read the article to find out something is actually broken.

I'm really curious to know what the symptoms are of whatever is broken. Are trades taking too long to execute? Are people being fulfilled at prices different than they were quoted? What is actually happening?

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I have heard that since coinbase keeps all but 2% of their crypto assets in "cold storage" (offline storage that requires a physical trip to somewhere to spend), there are semi-frequent times where their "hot wallet" runs out of money, and they need to go and retrieve it from cold storage in order to continue.

Naturally this would happen when there are large spikes in usage (which happen during swings in price) and people are trying to move cryptocurrencies out of coinbase.

So the latency are people's feet rapidly shuffling to another physical location?

That doesn't make a good story for the convenience and transfer speeds of some of this technology.

It feels like they're protecting prices or their capital reserves?

They go down practically every time there's a lot of volume. Not sure if they have publicly addressed what sort of infrastructure problems they're having though.

Have they gone down when the price is surging upward? I only ever see them going offline when the price goes down but I may have missed something.

Volume is likely to be higher when the price is getting hammered.

Panic, when it occurs, is more acute than ebullience.

Actually with volume its happened both ways. You can easily see from public data that volume doesn't only go mad when price is being hammered.

Yes the site always crashes under load

Just before the first futures it was surging and they went down. But anecdotally it does seem to happen more on the ride down

I did predict a few weeks ago that if things fall quickly, the systems will do down and people will not be able to sell:

https://news.ycombinator.com/item?id=15869668

If it's anything else such as allowing insiders to exit before a crash really takes hold, then people are going to jail.

Why? Are there regulations in place that forbid coinbase to halt their service?

This is not meant to be sarcastic, just wondering if there are laws in place even for unregulated markets like Bitcoin.

Do you really think it matters? Nobody touched the bankers over the financial crisis because they didn't want to touch them, not because nothing "illegal" was going on. Holder and Obama said it themselves that going after them "would hurt the economy". That was their justification for not prosecuting people.

Meanwhile they added 13 bogus charges against Aaron Swartz with a maximum sentence of 35 years for making some documents that were already internally public at the MIT, available to everyone.

If the gov wants to make an example out of Coinbase, especially after they put up a fight in the SEC case, then they will.

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