Following a database issue causing extended downtime of the Crypto.com exchange this week, CEO Kris Marszalek published a series of tweets confirming that the issue had been exploited by bad actors manipulating the price of ETH/USDT before the platform went offline periodically.
Some users of the centralized exchange attempted to exploit the database outages for personal gain, however, the exchange went into offline mode once the extent of the situation became apparent.
The CEO pointed to several “illegitimate” trades that had been executed “en masse”, with gains being locked in using other cryptocurrencies. The cause of the issue is still unclear, however, Crypto.com published an update to assure users that all funds were secure thanks to the platform’s risk management system. The Crypto.com platform was up and running again the same day after balances were rolled back to prevent losses.
As the cryptocurrency ecosystem evolves, centralized exchanges play a crucial role in tackling nefarious activity at a time when many parts of the community are pushing towards decentralization.
Centralized exchanges such as Crypto.com play a crucial role in onboarding new users that are risk-averse. Crypto.com is very well regulated and tax compliant, appearing to be acting transparently about the issue, assuring users that the situation is under control with real-time incident progress reports.
Financial freedom and decentralization are no-doubt a compelling prospect, but to get where many people in the space want to be, there will likely be steps along the way that require the high levels of security and protection offered by centralized exchanges.
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