Customers were unable to buy bitcoin from Vancouver's bitcoin ATM last weekend because its operator was unable to clear a backlog of buy orders.

The machine's operator, Bitcoiniacs, said the problem arose because the ATM relies on Bitstamp to clear its orders, and the exchange had allowed orders amounting to more than 45 BTC to pile up without being processed.

Bitcoiniacs uses a Robocoin machine, which is able to buy and sell bitcoin in exchange for fiat currency. Robocoin machines perform trades on the Bitstamp exchange by default. According Mitchell Demeter, co-founder of Bitcoiniacs, the exchange stopped processing buy orders for bitcoin from the ATM on 21st January.

The unprocessed orders eventually piled up to more than 45 BTC, he added. “We had several clients very concerned as they had deposited thousands of dollars and days later there was no sign of their coins."

Bitcoiniacs contacted Bitstamp repeatedly, but received "zero response" according to a reddit post by Bitcoiniacs announcing the ATM shutdown. The post read:

Bitcoiniacs stopped allowing buy trades through its ATM from the afternoon of 24th until the morning of 27th January. According to Demeter, around 80 clients were affected by the delayed transaction.

He said he received another 50 inquiries from customers who wanted to know when the ATM would resume executing buy orders for bitcoin. However, Demeter added that his customers responded calmly to the delay.

When CoinDesk contacted Bitstamp chief executive Nejc Kodric to corroborate Bitcoiniacs' claims, he refused to comment. Another inquiry, to Bitstamp's, general support e-mail address, was also met with a refusal to comment:

"Unfortunately, Bitstamp is unable to comment any of the points in your inquiry. For more information we kindly suggest you contact the ATM service directly."

Both Robocoin and Bitstamp could have implemented measures to prevent the backlog of transactions from building up, Demeter argued. One method would have been to create a 'hot wallet' which would allow coins to accumulate in the ATM operator's Bitstamp account.

This would effectively create a 'buffer' of a number of bitcoins to service withdrawal transactions. Withdrawals would come from this hot wallet, as opposed to sales from Bitstamp's open market. One drawback, however, is that hot wallets have been targeted by hackers in the past.

The other method Demeter suggested was for Bitstamp to 'whitelist' the ATM operator's account. This would signal to the exchange that the account was vouched for, and activity (such as an unusually large number of transactions) would not set off a red flag.

Bitcoiniacs said it would leave Bitstamp in response to the recent uncleared backlog and other problems it experienced in the past. It launched an exchange called Cointrader last month to handle transactions for its ATMs.

The exchange will also be aimed at other bitcoin businesses operating ATMs or brokerages. Demeter said the exchange will have bank accounts in the UK and Canada to service European and North American customers respectively.

It will also be able to take AstroPay transactions for customers in South America. Cointrader is set for a relaunch on 10th February to gain more exposure and liquidity, Demeter said, adding:

The Vancouver machine is the world's first bitcoin ATM. It was installed in the Waves coffee house last October. It attracted attention when it reportedly took more than $1m Canadian dollars within its first 29 days of operation. Operators have sprung up around Canada since then.

Featured image via Marc van der Chijs / Flickr