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Incident Put up Mortem: November 19, 2021

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Abstract

On November 19, 2021, Coinbase realized that it had erroneously credited some prospects transacting in GYEN and POWR both 100x or 1/a centesimal the quantity they bought. Coinbase promptly disabled buying and selling in POWR and GYEN, labored across the clock to resolve the underlying technical difficulty, after which made changes in buyer accounts to replicate the quantity of GYEN and POWR that prospects truly bought. This incident affected roughly 0.0072% of Coinbase’s whole verified customers.

What occurred?

On November 19 at roughly 4:00 p.m. EST, Coinbase up to date an inner knowledge supply associated to POWR and GYEN precision. The replace was examined by way of our commonplace automated testing and deployment monitoring procedures. Nevertheless, the testing didn’t detect that the replace would propagate at varied speeds by way of numerous inner programs and would end in prospects being credited both 100x or 1/a centesimal the quantity of GYEN or POWR they bought.

The info rollout error was recognized by way of our place threat monitoring programs 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 difficulty. At 7:26 p.m. EST, we recognized accounts that transacted in GYEN or POWR in the course of the knowledge rollout, and quickly restricted these accounts pending additional investigation. By November 21, restrictions had 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 appropriate the drawback?

Coinbase instantly devoted substantial engineering sources to rapidly appropriate the issue, making certain our prospects acquired the right amount of GYEN and POWR that they bought. For patrons who had 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 many who nonetheless had GYEN and POWR of their accounts, this was comparatively easy — we notified prospects of the error and easily debited these prospects’ accounts, eradicating the additional GYEN or POWR that was erroneously credited.

Some prospects had already transformed their GYEN and POWR to different digital belongings, corresponding to Bitcoin. Different prospects despatched their GYEN and POWR to wallets off the Coinbase platform, however saved different digital belongings on the Coinbase platform. For these prospects, we notified them of the error and, in accordance with the Coinbase Consumer Settlement, withdrew different belongings from these prospects’ Coinbase accounts equal to the quantity of GYEN or POWR that they had been over-credited.

When figuring out how a lot to debit from these prospects’ accounts, we used probably the most favorable change charge for our prospects. Particularly, we calculated the USD worth of the GYEN or POWR owed to Coinbase through the use of the lowest change charge on the Coinbase Trade 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 prospects. We then debited funds from consumer 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 charge on the time consumer accounts had been debited.

A small group of consumers who had 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 prospects individually and appreciates our prospects’ cooperation returning the erroneously credited GYEN and POWR. Reimbursement of the over-credited funds is required below the Coinbase Consumer Settlement.

For patrons who had been undercredited GYEN or POWR, receiving a decrease quantity than they bought, Coinbase first decided the quantity of GYEN or POWR owed to those prospects. Coinbase then calculated the USD worth of the GYEN or POWR owed to prospects through the use of the highest change charge 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 change charge for our prospects. That signifies that whatever the value prospects bought at, we assumed that the purchasers would have offered these belongings on the highest value whereas buying and selling was disabled. After calculating this USD worth, we credited prospects an equal quantity of Bitcoin. We credited these prospects in Bitcoin as a result of GYEN and POWR buying and selling was nonetheless suspended, and Bitcoin is utilized in each nation the place prospects had been affected.

To additional profit our prospects we used an change charge of $55,000/BTC, which was decrease than the market charge of BTC on the time these BTC funds had been made. This change charge ensured our prospects acquired extra Bitcoin than they’d have acquired had we used the precise BTC-USD change charge on the time.

Moreover, for all prospects whose accounts had been restricted, Coinbase offered a buyer expertise credit score of as much as $100 in BTC.

What occurs subsequent?

Many purchasers nonetheless have questions on how their accounts had been credited or debited due to this incident. For questions particular to your account, please be at liberty to succeed in out to Coinbase Assist.

Coinbase can be revising the knowledge in our prospects’ account statements and tax types to appropriately replicate our prospects’ GYEN and POWR transactions. In case your statements or tax types seem incorrect, please attain out to Coinbase Assist, however know that we’re working to appropriate that data as nicely.

GYEN Values Earlier than the Knowledge Rollout Error.

Within the days main as much as the information rollout error, between November 16 and November 19, Coinbase Trade noticed GYEN-USD break parity when in comparison with JPY/USD. We have now seen prospects speculate on social media that this incident was someway associated to this break in parity. We have now additionally seen prospects speculate that this break in parity was someway brought on by Coinbase. These allegations are false and replicate a misunderstanding about what GYEN is and the way Coinbase works.

The Break in Parity Occurred Earlier than and Was Not Associated to the Incident. This break in parity occurred days earlier than the incident. On the peak of this break in parity, on November 17, 1 GYEN traded for about ¥7.48.

The value of GYEN (blue) in Yen (pink) in the course of the break in parity, with a excessive of ¥7.48 (Pink Line Indicating the time of the Knowledge Rollout Error)

By the point the information rollout error occurred, on November 19, GYEN’s value stability had recovered and GYEN was buying and selling at roughly ¥0.96–0.98. When Coinbase unrestricted impacted prospects’ accounts, GYEN was buying and selling at roughly ¥0.98. In different phrases, the break in parity occurred earlier than the information 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 induced the break in parity. From November 17 by way of November 19, Coinbase carried out an alert, informing its prospects who had been shopping for, promoting and buying and selling GYEN of “Uncommon Market Exercise — On account of uncommon market exercise for GYEN, you’ll have hassle buying and selling GYEN on Coinbase.com. We apologize for any inconvenience brought on by this.” The break in parity occurred due to these market situations particular to the GYEN digital asset unrelated to Coinbase operations.


Incident Put up Mortem: November 19, 2021 was initially revealed in The Coinbase Weblog on Medium, the place individuals are persevering with the dialog by highlighting and responding to this story.

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