Anyone who’s ever traded crypto knows the feeling: the market suddenly crashes, charts turn red, and trading seems impossible. But what actually happens behind the scenes at a crypto exchange in that moment?
In a recent discussion, Julian Maddocks, a seven-year veteran at Kraken, explained how exchanges handle extreme stress moments and why some survive while others collapse.
What Goes Wrong During a Crypto Market Crash #
During a crash, thousands of people try to sell, buy, or close their positions all at once. This puts immense pressure on the exchanges’ systems.
Servers become overloaded, prices move at lightning speed, and small delays can have massive consequences.
What you see as a lagging screen is a huge challenge for exchanges: they must ensure all transactions are processed fairly, securely, and in the correct order.
“Everyone knows what’s at stake then. It’s not just about money, but about trust.”
Julian explains that this is precisely where many platforms go wrong. Some exchanges take too much risk or use customer funds to finance other projects. When things go wrong, everything comes to a standstill at once.
More Than Tech: The People Behind the Scenes #
According to Julian, a crypto exchange isn’t just about technology; it’s about people. During the October 10 crash, he happened to be at a conference when the market suddenly collapsed.
“Within minutes, my phone was glowing red. Customers were calling in a panic, and you immediately switch from networking to helping.”
While the market was plummeting, the entire team at Kraken was working at full speed. Technicians, risk teams, and customer service were in direct contact to keep everything stable. That focus on transparency is a deliberate choice.
Kraken customers can verify at any time that their funds actually exist. This is possible through independent audits (where external accountants check the funds) and through proof-of-reserves, a system that allows users to see for themselves that their coins are truly being held.
This provides peace of mind during moments when the market is in a panic.
What You Don’t See #
Behind every flickering chart and stuck order is a team working to keep the market stable.
For most users, this remains invisible, but it involves everything from emergency plans to preventative security.