BTC-e: Our Recent Issues Were Caused By a Surge In Users

Earlier this month we reported on a number of banking issues experienced by BTC-e users. The problems were related to the status of investor deposits, which were delayed en route to BTC-e.

The fact that the operators of BTC-e wish to remain anonymous (and go to great lengths to do so) did not help either.

BTC-e is anything but transparent: it uses third-party banking services to keep its name out of official records. At least one of the banks involved in the process is located in the Czech Republic; the BTC-e site references Bulgaria in its SEO descriptions; the founders, Russian programmers Aleksey and Alexander, honed their skills at the Skolkovo tech park; and the BTC-e managing company is based in Cyprus.

With all that in mind, it is understandable that investors were concerned by the issues.

Luckily BTC-e got in touch with CoinDesk to reassure the public that it is a legitimate operation. The team still wishes to remain anonymous (they wouldn't share their surnames), but the duo were willing to shed more light on BTC-e operations and the recent spate of banking issues. We were told that the problems were caused by a sudden influx of users over the last few weeks. Aleksey said:

“In November, we increased attendance from an average of 2-3k users to 13-15k. The number of bank transfers increased from 15-20 per day to 200-300 per day. In most cases, the delay in depositing bank transfers was associated with wrong payment details."

Aleksey told us that BTC-e is experiencing a shortage of personnel due to the increase in traffic and trading volume. The fact that BTC-e was understaffed apparently caused the delays, but we were told that the team is expanding and new members are currently undergoing training. BTC-e plans to announce the expansion soon.

Due to the nature of BTC-e’s money transfer system, this could have been a major problem. Although we like to think of bitcoin as a purely digital currency, the way BTC-e processes transfers is hardly simple, and it necessitates a lot of manpower.

BTC-e also pointed out that they have been in business for more than two and a half years, and reimbursed users affected when BTC-e’s LR API Secret Key was compromised last summer.

BTC-e insists that it was never hacked and that there is no reason for alarm.