Paradex affirmed that a database error reduced the price of Bitcoin to $0, leading to mass liquidations. The exchange reverted to its blockchain state after an eight-hour outage on Starknet.
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.
The exchange operates on the Starknet network. The disastrous mistake happened when a routine database migration shut down trading because users watched their positions disappear.
The Paradex team was able to rapidly discover the root cause and declare 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.
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.
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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.
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.
In recent months, Paradex has been struggling with increasing technical issues. A bot-attack flood in September 2025 overburdened legacy systems until they wobbled.
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.
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.
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