This past week, several cryptocurrency exchanges expressed difficulties in handling the huge influx of new users coming onboard daily. Several of the top trading platforms in the market have been seeing an addition of over 100,000 users per day.
Major exchanges including Coinbase, Kraken, Binance, Bitstamp and Bittrex have all been struggling to handle this sudden demand for cryptocurrencies. Some exchanges have made several updates to their systems to improve their performance, while other companies have temporarily suspended offering new user accounts.
Changpeng Zhao, the founder and CEO of Binance, the global market’s biggest cryptocurrency exchange shared that the company has been dealing with up to 250,000 new users on a single day. This has been slightly overwhelming, to say the least.
Zhao issued this apology last week, “Sorry guys, servicing existing members is higher priority at this point. Full team working around the clock. Both tech and support. Just too much demand. Added 250,000 new users in the last 24 hours.”
Binance shared this further information on Jan. 4, “due to the overwhelming surge in popularity, Binance will have to temporarily disable new user registrations to allow for an infrastructure upgrade. We apologize for any inconvenience caused.”
In December, Coinbase and Kraken spent a large amount of capital and resources to enhance customer support and make their sites more user friendly. Kraken announced major system upgrades in system performance and promised it would continue to work on making its trading site more supportive of new users.
In a formal statement Kraken explained, “We have made significant progress in the last week with the system upgrades and have realized moderate improvement in performance. Unfortunately, we were not able to complete all of the upgrades and the most impactful measures are yet to come. For the time being, systems should still be considered degraded and unreliable.”
Other companies, including South Korea’s Bithumb, the world’s second biggest cryptocurrency exchange in terms of daily trading volume, have also ceased accepting new users.
One of the struggles many cyrptocurrency exchanges face is the increasing demand from investors, due to the Know Your Customer and Anti-Money Laundering programs that companies have been legally forced to incorporate. Every application must be manually verified and approved, or else face severe consequences, such as extreme fines and lawsuits, for failing to distinguish fraudulent accounts from legitimate ones.
This is an unfortunate delay for those people who have finally decided they want to jump onboard the cryptocurrency train, but be assured that these companies are working as fast as possible to make improvements needed in order to open back up to new investors.