Bitcoin’s Zero Hour: A Most Unlikely Mishap

by

Paradex, ever the paragon of reliability, found itself in a bit of a pickle when a database error reduced the price of Bitcoin to zero, leading to mass liquidations. The exchange, after an eight-hour outage on Starknet, reverted to its blockchain state.

Paradex experienced a major system malfunction on January 19, 2026, which pushed the price of Bitcoin to 0 on the platform. It was reported by Jacob Kinge on X that the glitch caused mass liquidations of leveraged positions.

BREAKING: Bitcoin has FLASH-CRASHED to $0 on Paradex, a decentralized crypto exchange.

The exchange claims its due to a database migration glitch during maintenance. The crash triggered mass liquidations of leveraged long positions, a platform outage, and forced a chain rollback…

– Jacob King (@JacobKinge)

Source: JacobKinge, who’s probably the only person who knows what’s going on here.

The exchange operates on the Starknet network, which is probably just a fancy way of saying ‘a bunch of computers that sometimes forget what they’re doing.’ The disastrous mistake happened when a routine database migration shut down trading because users watched their positions disappear, which is the sort of thing that makes you question the entire concept of finance.

Database Migration Triggers Mass Chaos, or How to Ruin a Trader’s Day in 10 Easy Steps

The Paradex team, with the speed of a well-oiled (but slightly dented) clockwork, discovered the root cause and declared a rollback to block 1604710, which was dated 04:27:54 UTC, prior to the maintenance. Any open orders were force-cancelled; only take-profit and stop-loss orders remained open. In recovery mode, the platform entered CANCEL_ONLY mode, which is the crypto equivalent of ‘I’m not ignoring you, I’m just very busy pretending to be a different version of myself.’

The funds of users remained safe during the crisis. This was confirmed by Paradex on its status page, which said the recovery was more intricate than it had first believed. Because nothing says ‘we’ve got this’ like a status page that’s more complicated than a quantum physics equation.

You might also like: Bermuda Turns to Stablecoins to Modernize Public Finance, which is probably just a fancy way of saying ‘we’re out of ideas and need to look like we’re doing something.’

Eight Hours of Complete Darkness, or Why You Should Never Trust a Squirrel with Your Savings

At around 4:30 AM UTC, Paradex went offline and remained unavailable for eight hours. At 12:10 UTC, services were reinstated. The exchange manages a volume of 37 billion dollars a month, and the system failure impacted thousands of active traders. The STRK token of Starknet declined by 3.6 percent following the incident, which is about as much as a squirrel’s tail wagging in a storm.

Before full restoration, the POST_ONLY mode was enabled to ensure that the system could stabilize over time. Routine operations were re-established after thorough inspections, which is the crypto equivalent of ‘let’s make sure we don’t break anything else today.’

Previous Troubles Haunt the Platform, or How to Lose Friends and Alienate People

In recent months, Paradex has been struggling with increasing technical issues. A bot-attack flood in September 2025 overburdened legacy systems until they wobbled, which is the sort of thing that makes you wonder if the systems were built by a committee of monkeys with a caffeine addiction.

The founding team of the Exchange made losses during its downfall in FTX. The parent liquidity network, Paradigm, lost nearly 70 percent of client money, and its own treasury reduced by 60 percent. Because nothing says ‘we’re a responsible financial institution’ like losing 70% of your clients’ money and 60% of your own.

The idea of rollbacks in blockchain has caused controversy in the crypto communities. Back in December, Layer-1 network Flow thought about doing a similar action, but was forced to cancel the plan by community backlash. Because nothing says ‘we’re a decentralized network’ like a bunch of people screaming into the void until you back down.

Read More

2026-01-20 20:11