Backpack halted trading for scheduled maintenance at 10 a.m. UTC on July 3 and reopened two hours later, but the restart triggered account errors that forced CEO Armani Ferrante to promise reviews and compensation.

Backpack had warned users on X that the platform would go offline at 10 a.m., enter post-only mode at noon, and resume full trading at 12:10 p.m. The post-only window lets customers place or cancel maker orders but blocks taker activity. 

When spot and perpetual markets came back online, several users reported abnormal balance changes and order reversals.

A Brazil-based trader, identified as Defi Remora, wrote that a $104,000 withdrawal request submitted the previous night was returned to his account in the form of 891 Solana (SOL) after the downtime. 

The exchange simultaneously expanded his margin debit from 31,000 USDT to 111,000 USDT, leaving him to unwind the position manually at an estimated cost of $300 to $400.

Chinese user Hebi reported in a separate X thread that long positions flipped to short positions and that some holdings disappeared without a trace on the ledger. 

Hebi said no audit trail appeared in the account history and that the errors coincided with Backpack’s downtime.

Ferrante blames coding error, pledges restitution

Ferrante addressed the events in a message to the project’s Discord channel, calling the incident “a programming error” and “unacceptable.” 

He said the engineering team would “do a detailed review and further enhance our process so that it doesn’t happen again.” 

Ferrante asked affected customers to email support@backpack.exchange and stated that he would personally handle the claims. He wrote:

“If you had any issues that was our fault, we will compensate.”

Ferrante added that the incident did not involve custody infrastructure, claiming that the funds are completely safe. He further noted that Backpack employs a two-tier multi-party computation wallet, combined with cold storage custody and continuous asset-by-asset balance reconciliation.

Backpack CEO did not offer a timetable for a post-mortem but said the company would publish findings after completing an internal audit. 

He also reiterated Backpack’s policy of reimbursing any user loss caused by exchange malfunctions, including inadvertent liquidations or mis-priced fills.

To compensate users who had open positions and qualified for the potential airdrop of a Backpack native token, the company’s Chinese profile on X promised double the points for users with active trading positions on July 3.

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