On November 19, 2021, Coinbase discovered that it had erroneously credited some clients transacting in GYEN and POWR both 100x or 1/a hundredth the quantity they bought. Coinbase promptly disabled buying and selling in POWR and GYEN, labored across the clock to resolve the underlying technical problem, after which made changes in buyer accounts to mirror the quantity of GYEN and POWR that clients truly bought. This incident affected roughly 0.0072% of Coinbase’s complete verified customers.
On November 19 at roughly 4:00 p.m. EST, Coinbase up to date an inside information supply associated to POWR and GYEN precision. The replace was examined by our customary automated testing and deployment monitoring procedures. However, the testing didn’t detect that the replace would propagate at numerous speeds by a variety of inside methods and would end in clients being credited both 100x or 1/a hundredth the quantity of GYEN or POWR they bought.
The information rollout error was recognized by our place danger monitoring methods shortly after the November 19 4:00 p.m. EST replace. At 5:35 p.m. EST, we disabled transacting in GYEN and POWR pending decision of the underlying problem. At 7:26 p.m. EST, we recognized accounts that transacted in GYEN or POWR throughout the information rollout, and briefly restricted these accounts pending additional investigation. By November 21, restrictions have been eliminated for 98.8% of those accounts and, by December 13, Coinbase restored full buying and selling for GYEN and POWR.
What did Coinbase do to right the downside?
Coinbase instantly devoted substantial engineering sources to shortly right the issue, making certain our clients acquired the right amount of GYEN and POWR that they bought. For clients who have been erroneously over-credited 100x the GYEN and POWR they bought, we ensured that they acquired the right amount of belongings that they paid for. For those that nonetheless had GYEN and POWR of their accounts, this was comparatively easy — we notified clients of the error and easily debited these clients’ accounts, eradicating the additional GYEN or POWR that was erroneously credited.
Some clients had already transformed their GYEN and POWR to different digital belongings, corresponding to Bitcoin. Other clients despatched their GYEN and POWR to wallets off the Coinbase platform, however stored different digital belongings on the Coinbase platform. For these clients, we notified them of the error and, in accordance with the Coinbase User Agreement, withdrew different belongings from these clients’ Coinbase accounts equal to the quantity of GYEN or POWR they’d been over-credited.
When figuring out how a lot to debit from these clients’ accounts, we used probably the most favorable alternate price for our clients. Specifically, we calculated the USD worth of the GYEN or POWR owed to Coinbase through the use of the lowest alternate price on the Coinbase Exchange from the time this incident started till buying and selling was halted ($0.00825/GYEN, $0.4742/POWR). This minimized the quantity owed to Coinbase by these clients. We then debited funds from person accounts as much as this USD worth, beginning with their fiat balances, then USDC and different stablecoin balances, adopted by different digital asset balances ranked by descending market cap. The worth of those digital belongings was calculated utilizing the market price on the time person accounts have been debited.
A small group of consumers who have been erroneously over-credited GYEN or POWR despatched these digital belongings off-platform and left no different belongings on the Coinbase platform. Coinbase has been reaching out to these clients individually and appreciates our clients’ cooperation returning the erroneously credited GYEN and POWR. Repayment of the over-credited funds is required underneath the Coinbase User Agreement.
For clients who have been undercredited GYEN or POWR, receiving a decrease quantity than they bought, Coinbase first decided the quantity of GYEN or POWR owed to those clients. Coinbase then calculated the USD worth of the GYEN or POWR owed to clients through the use of the highest alternate price from the beginning of the incident till the remediation course of was accomplished ($0.009799/GYEN, $0.9617/POWR), which was probably the most favorable alternate price for our clients. That signifies that whatever the price clients bought at, we assumed that the purchasers would have offered these belongings on the highest price whereas buying and selling was disabled. After calculating this USD worth, we credited clients an equal quantity of Bitcoin. We credited these clients in Bitcoin as a result of GYEN and POWR buying and selling was nonetheless suspended, and Bitcoin is utilized in each nation the place clients have been affected.
To additional profit our clients we used an alternate price of $55,000/BTC, which was decrease than the market price of BTC on the time these BTC funds have been made. This alternate price ensured our clients acquired extra Bitcoin than they’d have acquired had we used the precise BTC-USD alternate price on the time.
Additionally, for all clients whose accounts have been restricted, Coinbase supplied a buyer expertise credit score of as much as $100 in BTC.
What occurs subsequent?
Many clients nonetheless have questions on how their accounts have been credited or debited due to this incident. For questions particular to your account, please be at liberty to succeed in out to Coinbase Support.
Coinbase can be revising the data in our clients’ account statements and tax types to appropriately mirror our clients’ GYEN and POWR transactions. If your statements or tax types seem incorrect, please attain out to Coinbase Support, however know that we’re working to right that info as nicely.
GYEN Values Before the Data Rollout Error.
In the times main as much as the info rollout error, between November 16 and November 19, Coinbase Exchange noticed GYEN-USD break parity when in comparison with JPY/USD. We have seen clients speculate on social media that this incident was one way or the other associated to this break in parity. We have additionally seen clients speculate that this break in parity was one way or the other brought on by Coinbase. These allegations are false and mirror a misunderstanding about what GYEN is and the way Coinbase works.
The Break in Parity Occurred Before and Was Not Related to the Incident. This break in parity occurred days earlier than the incident. At the height of this break in parity, on November 17, 1 GYEN traded for roughly ¥7.48.
By the time the info rollout error occurred, on November 19, GYEN’s price stability had recovered and GYEN was buying and selling at roughly ¥0.96–0.98. When Coinbase unrestricted impacted clients’ accounts, GYEN was buying and selling at roughly ¥0.98. In different phrases, the break in parity occurred earlier than the info rollout error and the 2 points had nothing to do with every different.
How the Break in Parity Occurred. When Coinbase listed GYEN, there was important demand for GYEN that would not be matched by provide. The surge in purchaser demand for GYEN, coupled with the inadequate provide of GYEN throughout all markets (not simply Coinbase), in the end precipitated the break in parity. From November 17 by November 19, Coinbase carried out an alert, informing its clients who have been shopping for, promoting and buying and selling GYEN of “Unusual Market Activity — Due to unusual market activity for GYEN, you may have trouble trading GYEN on Coinbase.com. We apologize for any inconvenience caused by this.” The break in parity occurred due to these market situations particular to the GYEN digital asset unrelated to Coinbase operations.
Incident Post Mortem: November 19, 2021 was initially revealed in The Coinbase Blog on Medium, the place individuals are persevering with the dialog by highlighting and responding to this story.