The major cryptocurrency and Bitcoin trading platforms within the international market have been adding over 100,000 users per day.
The majority of the leading cryptocurrency exchanges like Binance, Bittrex, Bitstamp, Coinbase (GDAX), and Kraken are struggling in dealing with the rapid surge in demand for cryptocurrencies. Some exchanges have revamped their systems in order to improve their scalability, while others have temporarily stopped accepting new user accounts.
According to Changpeng Zhao, the founder and CEO of Binance, the largest cryptocurrency exchange of the global market with a $9.5 billion daily trading volume, revealed that the exchange has added over 250,000 users on a single day.
On January 4, Binance stated that due to the overwhelming growth in popularity, the exchange will have to temporarily deactivate new user registrations in order to allow for an infrastructure upgrade.
Last month, both Coinbase and Kraken allocated a significant portion of their capital and resources in improving the scalability and the customer support of their platforms. On December 23, Kraken, which was struggling in processing account verifications, claimed that it has implemented major system improvements and upgrades in performance and will keep developing its trading platform to support new users.
The development team of Kraken admitted that its current infrastructure is unreliable and degraded and promised to improve it in January.
Further, some regional exchanges like Bithumb of South Korea, (the second largest cryptocurrency exchange of the world in terms of daily trading volume), have also stopped creating new users’ accounts.
Why are large exchanges platforms struggling?
Even with such high-profit margins many resources and large market valuation, the largest cryptocurrency exchanges are facing problems to address the massive increasing demand from investors. This is due to the strict Anti-Money Laundering (AML), and Know Your Customer (KYC) policies that authorities force the exchanges to implement.
Note that each user application must be verified and approved manually. Considering that exchanges are adding over 100,000 accounts per day, it is possible that exchanges are also receiving over one million trading account approval requests every month, at least.
If the accounts’ approval process takes about 10 minutes per account, it results in 166,666 hours on a monthly basis that employees have to manually cover.
Currently, new users will face difficulties joining an exchange platform
In the upcoming months, global cryptocurrency exchanges will make great changes to their systems. Until then, many users, especially the new ones, will find it difficult to register approved trading accounts.