Paradex refunded approximately 200 users $650,000 after a scheduled 30-minute maintenance upgrade on January 19, causing unexpected liquidations in multiple markets on Paradex Chain.
The platform shared a post-mortem on X on January 23, stating that the incident occurred when an unexpected scale-up error reset the funding index to zero, distorting funding gains and losses and forcing liquidation during a short maintenance period. Paradex confirmed that the issue was an operational issue and not the result of a hack or security breach.
Paradex is an on-chain derivatives platform that allows traders to place leveraged perpetual bets while maintaining control of their funds rather than parking them on a centralized exchange.
Paradex implements rollback after database upgrade malfunction
Post-mortem analysis of the incident – January 19th
what happened
On January 19th, during a scheduled 30-minute maintenance window to upgrade the database (to meet increased demand), an unexpected issue occurred during the scale-up process. A race condition occurs while restarting the service while critical data is present…
— Paradex (@paradex) January 23, 2026
Paradex stated that the extent of the disruption across multiple users and markets makes a targeted solution impractical and requires a complete rollback to a healthy pre-maintenance state.
The platform has temporarily blocked access and initiated a rollback procedure to restore the chain to the snapshot taken before the upgrade began. To ensure a controlled recovery, we have canceled all open orders except take profit and stop loss orders. The platform further revealed that during the short post-only period, some users were affected by aggressive trading that distorted prices and led to additional liquidations, primarily on PAXG.
according to For affected users, the platform announced that it had refunded $650,000 to 200 accounts from its liquidator vault after auditing all accounts affected by improper liquidations (and other lingering issues).). Additionally, we have made it clear that all remaining data inconsistency concerns on the Portfolio and Vault pages must be fixed by Monday, January 26th.
In response to this incident, Paradex announced that it has implemented enhanced service resumption procedures and additional data verification safeguards. The platform also said it has implemented a revised scale-up process for a complete downtime maintenance period. We also rolled out price range protection for the post-only period.
The exchange further stated that changes it has since introduced have strengthened its ability to operate securely as the system expands.
However, Paradex acknowledged that this incident was the first chain rollback and described it as an “undesirable but necessary measure to protect our users and restore the integrity of our network.”
Infrastructure failure exposes vulnerabilities across global trading platforms
Recent incidents illustrate how access to cryptocurrency markets and futures trading can be hampered by operational and infrastructure issues rather than hacking.
On October 10 last year, decentralized exchange dYdX halted trading for about eight hours due to incorrect price trades and liquidations due to code order issues and oracle restart delays. Cryptopolitan reported The exchange has proposed a governance vote that would compensate affected traders up to $462,000 from the protocol’s insurance fund.
Apart from dYdX, the incident has put Binance’s trading services under pressure due to significant price fluctuations, user complaints, and regulatory attention. Traders expressed their displeasure with Binance as they were unable to complete their holdings due to technical issues. This was accompanied by Ethena’s USDe synthetic stablecoin and UI-issued depegging, which saw several tokens with prices below zero.
After the outage, sources reported that Binance was not responsible for traders’ losses. Nevertheless, cryptocurrency exchanges Launch of $400 million aid program for disaster victims. The project includes $100 million for affected industry participants and $300 million in token vouchers.
Technical issues are also impacting traditional derivatives markets. November 2025, Chicago Mercantile Exchange (CME) Paused Trading continued for about 10 hours after a cooling failure occurred at the CyrusOne data center in Illinois following concerns from traders.
That same month, internet infrastructure provider Cloudflare announced “degradations in internal services.” An issue affecting the front-ends of a number of major cryptocurrency platforms has left users temporarily unable to access exchanges, wallets, and data dashboards.
This downtime affected crypto companies such as Coinbase, Blockchain.com, BitMEX, Ledger, and DefiLlama.
