Cryptocurrency exchanges mistakenly sell bitcoin for 88% cheaper

PDAX Goes Down, Now Asks Its Customers To Return Their Bitcoins, Threatens Legal Action

What happened: The failure of PDAX, the largest cryptocurrency exchange in Southeast Asia, based in the Philippines, caused bitcoin to trade at $6,000, 88% below current prices.

Following the incident, PDAX demanded its customers return their bitcoins and threatened legal action, local media Bitpinas reported.

According to the exchange’s CEO, the system error was not due to a hack, but a “glitch” caused by a massive increase in trading activity.

Why it matters: The initial cut is said to have occurred on February 18. Since then, however, some customers have reported on social media that they were unable to access their exchange accounts, claiming they were being asked to “return their bitcoins.”

“Almost 24 hours later, they sent me a letter of demand and a text message asking me to return the BTC or they ‘may’ be forced to take legal action against me,” said one, arguing that his purchase was in their right, and did not violate any laws or regulations of the trading platform.

Rafael Padilla, a lawyer representing affected users who currently have no access to their accounts, commented on the topic on Facebook.

“Our clients’ business transactions are legal under applicable law, adjudicated cases, and of course PDAX’s own terms and conditions/user agreement.”

According to Padilla, PDAX chose to prevent users from accessing their accounts because it could not unilaterally reverse transactions.

An official statement from PDAX stated that 95% of accounts have been recovered. However, according to the report, many users are still unable to access their accounts.

“Many users are understandably upset about being able to buy what they think is an order for bitcoin at a very low price. But sadly, the exchange never owns the underlying bitcoin, so sadly, never really something that can be bought and sold,”PDAX CEO Nichel Gaba said in a press conference earlier today.

PDAX Goes Down, Now Asks Its Customers To Return Their Bitcoins, Threatens Legal Action