BitBay exchange goes offline for 18 hours, raises exit scam suspicion

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European digital currency exchange BitBay went offline for around 18 hours, blaming a third-party service provider for the incident. Expectedly, its users weren’t too happy about it, with many fearing that this was just a cover-up for a much greater problem.

BitBay revealed that it was experiencing a network outage yesterday, March 26, via Twitter. It blamed the outage on an external service provider and promised to resolve the issue as fast as it could.

https://twitter.com/BitBay/status/1243090441236553728

Many assumed that this meant an hour or two, but as it turned out, this ended up being over 18 hours. Four hours into the outage, the exchange tweeted that the problem “was more complicated than we initially thought.” It pledged to launch the exchange, but block transaction processing. The users could cancel or add offers, however.

About three hours later, it took to Facebook to address the growing concerns of its reported 800,000 users. The founder and former CEO Sylwester Suszek was in charge of the Facebook chats. This didn’t bear much fruit, with the exchange withholding vital information such as the identity of the third-party service provider who had caused the outage. All the users received as response to pressing questions was, “Technical work is ongoing. We apologize for the inconvenience.” It published this same message on its website.

Several users voiced their concerns, with many fearing the worst – that it was an exit strategy, and rightly so. The digital currency space has witnessed some heart-wrenching exit scams where millions of dollars have sunk. In 2019 alone, investors lost $3.1 billion to exit scams, a report by CipherTrace revealed. The cybersecurity firm labeled the 2019 as the year of exit scams. South Korean firm Plus Token accounted for the majority of this.

BitBay was able to recover, although partially at first. Users could be able to log in and cancel listed orders. They had about five hours to cancel their orders before full trading resumed. The exchange has yet to disclose the details of the outage, including the source of the outage and steps taken –if any – to prevent a similar event in the future.

BitBay launched in Poland in 2014 where it operated until it came to odds with the Polish government. The exchange had to shift its operations to Malta. It claims to be the third-largest exchange in Europe, offering support for Bitcoin SV and over 35 other digital currencies.

The BitBay outage comes just weeks after two of the largest digital currency exchanges, Huobi and OKEx experienced similar fates. Their outage came about as a result of a sudden spike in trading activity following price changes. The two have now offered to compensate all the users who lost funds as a result of the outage.