Cryptopia freezes trading in markets due to surge in demand

Monday, 8 January 2018

Cryptocurrency hype, sparked by the rise in Bitcoin value, has put pressure on trading platforms.

A New Zealand cryptocurrency trading firm has had to suspend some of its trading activity because of a market frenzy.

Christchurch-based Cryptopia had 100,000 new user registrations in one day on Sunday. Its membership doubled from 500,000 to 1 million over December. A year ago, it only had 30,000 users.

Christchurch-based cryptocurrency exchange Cryptopia's founders Adam Clark and Rob Dawson .

Business development manager Adam Lyness said it had had to suspend trading in two basemarkets, in the Doge and Litecoin currencies, to keep up with demand.

Suspending the activity in those smaller markets allowed it to continue to cater for trading in the bigger markets, such as Bitcoin.

That decision was made to affect the lowest number of users possible, he said.

'We haven't suspended trading in any specific tokens per se, but a small number of tokens may only be listed on those base markets. This was the option that had the least user impact.'

He said Cryptopia was doing what it could to get all markets active again but it could take some time.

'It should be noted that users are able to withdraw tokens to external wallets or other sites at any time, we're not 'holding' their funds.'

He said no user money had been lost or stolen.

In an update posted on its website, Cryptopia founder Rob Dawson said he was aware of concerns about the level of service it could offer.

'That is not due to any complacency on our part, rest assured that we are hiring people and developing the processes to manage those people to grow with the demand we're facing and scale as best we can.'

One user, Canadian Dustin Picov, has US$20,000 (NZ$27,892) on the platform. He said he had seen his money in the Doge currency increase in value by 100 per cent since Friday but he could not sell because trading on the market was frozen. 'Why can't they let us trade for a few minutes and halt Bitcoin?'

He said his account had been locked after he complained.

Lyness said one user's account had been temporarily suspended because he had been making physical threats against staff.

Cryptopia is registered on the Financial Services Providers Register in New Zealand. Currency trading, including cryptocurrencies, is an unlicensed activity but providers still have 'fair dealing' obligations.