Digital asset trading platforms are in turmoil again, investors need to be cautious

For some altcoin investors, two big news happened in late March. One was that on March 27, BTR suddenly announced the delisting of 45 altcoins, and the other was the abnormal price fluctuations in the Bitcoin Era trading market in the early morning of March 29.

Event 1: BTER delisted 45 competing coins

On March 27, BTR released the "Notice of BTR Currency Offline" on its official website. The announcement showed:

Many old currency development teams have disappeared, the currency has fallen into disrepair, and the network is unstable. We have found it difficult to maintain it, and there is a high risk of forks and attacks. The huge amount of energy consumed has greatly reduced our user experience and caused inconvenience to users, especially the delay in deposits and withdrawals. We deeply regret and feel guilty.
In order to revive Bter and provide better services to users, we will first delist some currencies that are difficult to maintain and have long-term low trading volumes. For delisted currencies, we will do our best to guide users to transfer to other trading platforms or withdraw to wallets.
Please check your offline currency in your personal account within one month and initiate a withdrawal operation.

As soon as the announcement was made, some investors reported that the delisting of multiple currencies caused them considerable losses. Among the many comments under the announcement on the BitTorrent official website, there were more negative comments than positive ones. The vast majority of users believed that even if some old currencies were difficult to maintain, users should be notified a few days before the official delisting, rather than suddenly delisting them, catching users off guard and even making it difficult for them to trade and withdraw cash.

Some Bter users suggested that a separate “delisting zone” could be established, where delisted coins could be traded. Once trading becomes active again or a new team takes over, they could even be returned to the mainstream trading zone. This would avoid causing sudden losses of user assets.

Then on March 29, BIT released the "BIT's Measures for Handling Offline Currencies that Are Difficult to Transfer and Cash Out" to respond to users' questions about withdrawals and transfers. The announcement shows:

If there is a problem with the block, the wallet has no development team to maintain it, or users have difficulty finding virtual currencies to trade on other platforms, Bither will do everything it can to help users complete the exchange.
In the subsequent process of listing new coins, BTER will, with the consent of the development team and the voluntary participation of users, use the funds contributed by the development team plus BTER's profit to exchange the non-transferable assets in the user's account for new coins (tradable assets) according to the average market price when the offline currency stops trading.

For Bter, this move may cause some users to leave. Users commented that in the case that old currencies are difficult to maintain, users do not object to the removal of the products, but at least they should be notified in advance and properly handle the assets of users who are difficult to trade and withdraw. After the coin loss incident, it is difficult to rebuild users' confidence in Bter. I hope that this matter can be properly handled in the end.

Appendix: Review of some cases of delisting currencies on domestic platforms (Source: BitTimes)

In September 2013, BitTimes delisted YAC due to low trading volume, and the platform rewarded users by exchanging 1 YAC for 2 XRP coins.
In December 2013, BitTimes listed the Dragon Coin ISK, but it was removed from the market after only two hours of trading. The platform paid all users who bought it at the original purchase price.
In September 2015, JuBi said that the transaction volume of Dash was too low and removed DASH from its listing without any additional compensation or rewards.
In December 2015, Yibi.com announced that Red Star Coin, John Coin and Service Coin were officially dissolved and removed from the shelves. Users could exchange them for CoinLink Coin.
In January 2016, BitTimes delisted SYNC due to low trading volume, and the platform rewarded users based on the average transaction price of SYNC over the past three months.
In February 2016, Goubi.com said that there were too few nodes in the Hongbi network and removed Hongbi from the shelves without any additional compensation or rewards.
In March 2016, Goubi.com announced that it had a dispute with the development team of Bass Coin and removed Bass Coin from its shelves. Users can convert Bass Coin into Geek Coin.
In March 2016, Yibi.com announced that after communicating with Lebi officials, it decided to remove Lebi from the shelves without any additional compensation or rewards.
In March 2016, Bither removed more than 40 currencies from its shelves to reduce maintenance costs.

Event 2: Abnormal transactions of some currencies in the Bitcoin era

Around 2 a.m. on March 29, some currencies in the BitEra experienced abnormal transactions. The affected currencies include: Bitcoin, with 620 abnormal transactions and no abnormal prices; Blackcoin, with 1,737,543 abnormal transactions, with the highest price being 0.239cny and the lowest price being 0.001cny; Dash, with 2,829 abnormal transactions, with the highest price being 95BTC and the lowest price being 0.01649btc; Litecoin, with 5,840 abnormal transactions, with the highest price being 0.00701BTC and the lowest price being 0.001btc. In addition, many other currencies experienced abnormal declines.

The incident occurred at 2 a.m., and BitTimes responded quickly. The technical team investigated in time and temporarily shut down the website for processing. The website returned to normal at 7:30 a.m. on the 30th. Afterwards, BitTimes issued an announcement stating that about 5 accounts involved in this incident had their transaction API keys stolen by hackers and were maliciously traded in the market. The relevant transaction records operated by the hackers have also been rolled back, and the relevant assets have been returned to the stolen accounts.

Since the incident happened in the early morning, most users did not suffer any trading losses, but it still sounded the alarm for digital currency investors and platforms. In this incident, once the hacker successfully withdraws funds, the losses will be difficult to recover.

Full announcement:
"Notice on abnormal price fluctuations in the trading market in the early morning of the 29th"

Another forum user analyzed the hacking incident from a technical analysis perspective: "Technical Analysis of the Stolen Bit Era"

Here is a reminder:
When introducing new coins, trading platforms should conduct more assessments and establish a set of standards that are responsible to users;
Before investing, users should do due diligence to understand the development team, technical construction, etc., and ensure the transfer and storage of digital assets. Your money is your own, so you should be highly cautious in digital currency investment and asset custody.