Alpaca restored cryptocurrency deposits and withdrawals on November 8 after a third-party transaction-screening outage delayed transfers for 90 hours and 27 minutes, just under four days. The company confirmed that its external provider had fully restored the screening service and that all pending deposits had been credited to customer accounts.
The disruption was first reported at 5:29 p.m. EST on November 4. Alpaca said an external wallet provider it uses to screen cryptocurrency transfers was experiencing an outage, leaving affected deposits and withdrawals on hold. The company attributed the incident to the third party rather than its own systems and said customer funds remained safe.
At 9:43 a.m. EST on November 8, Alpaca announced that the provider had restored its screening service and that its systems had reconnected. The company began reviewing and releasing transfers held during the disruption, processing them in order.
By 11:56 a.m., Alpaca confirmed that the backlog of pending deposits had been completely processed. Withdrawal requests that could not be completed during the outage were cancelled, with the corresponding funds returned to customer balances. Affected customers were instructed to submit new withdrawal requests.
The deposits, at least, were dealt with in one final sweep.
Alpaca said other services were not affected and that the delayed transfers had been held rather than lost. It did not identify the screening provider, disclose how many customers were affected or quantify the total value of delayed transactions.
A screening provider became a critical point of dependency
The incident exposed Alpaca’s dependancy on an external service responsible for screening cryptocurrency movements. Although the company’s trading and other platform functions remained available, customers could not complete transfers in either direction while the screening service was unavailable.
That is a seperate question from whether customer assets were safe: a balance can remain intact while its owner cannot move it. For customers using cryptocurrency transfers to fund accounts, withdraw holdings or move assets between platforms, the distinction has direct operational consequences.
Alpaca’s public incident updates did not explain whether an alternative screening provider, manual-review process or other contingency arrangement was available during the disruption. The company instead described a process in which held transactions would be released once the external service recovered.
The service can look normal on the app while the transfer itself is still stuck at a checkpoint upstream.
The timing overlaps with another crypto screening disruption
Alpaca’s incident began on the same date that blockchain intelligence company Chainalysis reported a separate disruption affecting its transaction-screening products. On November 4, Chainalysis took its Know Your Transaction interface and API offline at approximately 10:30 a.m. EST following abnormal activity affecting its systems.
Alpaca’s first incident notification came approximately seven hours later. The timing creates an obvious point of comparison, but Alpaca has not identified its provider, and neither company’s public disclosures establish a connection between the two incidents. There is therefore no confirmed basis for identifying Chainalysis as the provider involved in Alpaca’s outage. DaveFinances previously examined Chainalysis’ screening-service shutdown and its wider impact on cryptocurrency monitoring infrastructure.
Other cryptocurrency platforms also experienced third-party service disruptions during the same week. Nubank restored cryptocurrency transfers after an external data-provider problem, while Mercado Pago reported restrictions involving an outside provider responsible for risk monitoring and anti-money-laundering services. The two Brazilian platforms described different operational problems, without establishing that they shared a supplier. Their incidents are covered in DaveFinances’ report on Nubank’s recovery and Mercado Pago’s continuing crypto-transfer restrictions.
These cases highlight how transaction-screening, risk-monitoring and other external services can become essential parts of cryptocurrency transfer infrastructure. A platform may retain access to its accounts and trading functions while losing the ability to approve or process movements of digital assets.
Alpaca has demonstrated alternative routing elsewhere
This is not the first time Alpaca has faced an interruption involving an external infrastructure provider. In October, a disruption at Blue Ocean ATS affected overnight U.S. stock market data and Alpaca’s fractional-share trading functionality.
Alpaca said whole-share orders could continue through alternative trading systems, even while overnight fractional and notional orders were temporarily disabled. That incident demonstrated that alternative execution routes could preserve some trading functionality when an upstream provider became unavailable.
The comparison has limits. Routing securities orders through alternative venues is different from replacing a transaction-screening service, particularly when the latter forms part of a platform’s risk and compliance controls. Still, the earlier incident provides an example of how different contingency arrangements can determine which services remain available during an external disruption. DaveFinances examined the episode in its report on the Blue Ocean ATS outage affecting Alpaca and Bitget.
Vendor continuity becomes the harder question
FINRA’s vendor-management guidance provides a relevant regulatory benchmark for financial firms outsourcing critical functions. Its August 2021 Regulatory Notice 21-29 asks member firms whether their business-continuity planning and testing includes third-party vendors and whether contingency plans address interruptions or termination of vendor services.
The notice also discusses due diligence, vendor oversight and the need to evaluate the potential customer impact when an external provider fails to perform a critical function. It is guidance rather than a new regulatory rule, and it does not constitute a finding against Alpaca. Its recommendations nevertheless illustrate the operational questions raised by prolonged third-party service interruptions. The full FINRA guidance on third-party vendor management and business continuity is available in its Regulatory Notice 21-29.
And the public notices leave one practical question unanswered: how much resiliance was built around that vendor? Alpaca has not disclosed whether it can switch to another screening provider, conduct alternative reviews or maintain a limited transfer service during a similar outage.
The episode exposed a dependancy on a third-party screening provider, while other Alpaca operatons remained available. Restoring the service resolved the immediate backlog, but the company’s public disclosures have yet to explain how it would prevent another extended interruption from producing the same result.
Johan Shamshad is Editor-in-Chief at Dave Finances, covering financial markets, digital assets, trading platforms, brokers, fintech, payments and regulation. Since 2023, he has also worked as an editor at Gulf News, the UAE English-language newspaper published by Al Nisr Publishing LLC. His work focuses on market-moving developments, company disclosures, regulatory changes and trading infrastructure, with an emphasis on primary-source verification and practical context for traders and investors.