Backpack Trading Platform Faces Major Glitches After Scheduled Maintenance: A Comprehensive Overview
On July 3, at 10 a.m. UTC, the trading platform Backpack commenced scheduled maintenance, halting all activities for two hours. Originally, the company had issued clear notifications on their X profile, indicating a series of changes: a transition to "post-only mode" by noon, followed by a full trading resumption at 12:10 p.m. While this phase typically allows users to place or cancel maker orders, it restricts taker activities. Unfortunately, once trading resumed, users encountered a host of troubling errors related to account balances and order executions, prompting an urgent response from CEO Armani Ferrante.
Several users reported significant discrepancies in their account balances and unexpected order reversals upon the platform’s reopening. One notable incident involved a Brazil-based trader known as Defi Remora, who experienced a shocking alteration in his accounts. Remora had initiated a withdrawal request for $104,000 before the downtime, but the funds reappeared as 891 Solana (SOL) after the maintenance. Furthermore, he lamented that Backpack inflated his margin debit from 31,000 USDT to an astounding 111,000 USDT. This unexpected change forced him to manually adjust his position, incurring costs estimated between $300 and $400.
In a separate report, a Chinese user identified as Hebi revealed even more alarming issues. He claimed that his long positions had inexplicably flipped to short positions, and some assets vanished entirely from his ledger. Compounding the problem, Hebi could not find any record of these transactions in his account history, which he attributed to the maintenance period’s disruptions. As these alarming concerns unfolded, many users began to question the integrity and reliability of Backpack’s services.
Responding to the incident, CEO Armani Ferrante took to the project’s Discord channel to provide clarity and assurance. He attributed the troubles to a "programming error" that he deemed "unacceptable." Ferrante assured users that the engineering team would conduct a thorough review to prevent such issues in the future. He also urged affected clients to reach out via email for claims, stating, "If you had any issues that were our fault, we will compensate." While he emphasized that the glitch did not affect the preservation or custody of funds, users remained anxious regarding the security of their assets.
The assurance included details about Backpack’s security infrastructure. Ferrante highlighted that the exchange utilizes a two-tier multi-party computation wallet, combined with cold storage custody and rigorous asset-by-asset balance checks. Although there was no definitive timeline offered for a post-mortem analysis, he committed to fully disclose the findings upon the conclusion of the internal audit. Ferrante also reiterated Backpack’s policy of compensating users for losses caused by exchange malfunctions, including unintentional liquidations and mis-priced fills.
In a bid to address the dissatisfaction among affected users, the company took steps to incentivize its community. Backpack’s Chinese profile on X announced a double points reward for users maintaining active trading positions throughout July 3, particularly appealing to those who were expecting an airdrop of a native token. This move aims to regain user trust while ensuring that the community feels valued even amid a crisis.
As Backpack undertakes damage control and works on rectifying the situation, it remains imperative for the trading platform to reinforce its commitment to transparency and reliability. The events of July 3 serve as a critical reminder of the importance of robust infrastructure and vigilant oversight in the volatile world of cryptocurrency trading. Users hope the platform emerges from this incident with stronger safeguards and a renewed dedication to user security.
