Bitcoin price flash crashed to $8,200 on Binance.US platform

abdelaziz Fathi

Bitcoin price briefly crashed to $8,200 (not a typo) Wednesday on Binance.US, the American outpost of the world’s biggest crypto exchange.

Binance.US

The platform’s BTC/USD feed plunged nearly 90 percent from around $65,000, possibly causing liquidations to occur on a highly uncertain published price.

This was apparently an off-market quote relative to the BTC price available on other markets. However, it’s unclear if the error has resulted in severe consequences for Binance.US users.

“One of our institutional traders indicated to us that they had a bug in their trading algorithm, which appears to have caused the sell-off that was reported this morning. We are continuing to look into the event but understand from the trader that they have now fixed their bug and that the issue appears to have been resolved,” the spokesperson said, declined to comment on further details about the crash,” a Binance.US spokesperson told CoinDesk.

While split-second crashes may be started by humans, cryptocurrency market structure means mistakes are more likely to snowball rapidly. Concerns that crypto exchanges have become more susceptible to flash crashes, a term applied when an asset price briefly surges or plunges for no obvious reason, have grown due to the rise in trading computerization.

Crypto flash crashes also exposed systemic issues under the surface of the nascent ecosystem, which exacerbates episodes of volatility when combined with leverage offered by many platforms.

Earlier in September, users of Pyth Network, an oracle platform that provides verifiable market data to sophisticated DeFi applications, were rattled after an unknown error caused more than 90 percent plunge in Bitcoin price.

The possible “fat finger” mistake showed the Pyth briefly reported Bitcoin’s price as $5,402 at a time when the primary cryptocurrency was trading at around $42,000 per unit elsewhere.

Binance CEO Changpeng Zhao said last month that depending on business growth, Binance.US is eyeing a potential IPO route to go public within three years. CZ told tech publication The Information that Coinbase, which became the first crypto exchange to go public, helped set up a playbook for crypto firms to do IPOs.

Although the company generated $800 million–$1 billion in profit last year, Binance.US is looking at a proper way to get VC money. Namely, CZ expects the US affiliate to close a large private funding round within the next two months in a bid to reduce its dependence on the global parent entity.

Read this next

Digital Assets

Russian Duma’s working group to address gaps in crypto regulation

A working group formed by the Russian State Duma to tackle the issues of cryptocurrency regulations is set to hold its first meetings, said the head of the parliamentary Financial Market Committee, Anatoly Aksakov.

Digital Assets

Kevin O’Leary says XRP lawsuit is “a very bad idea”

“I have zero interest in investing in litigation against the SEC, that is a very bad idea”.

Industry News

SFC freezes 17 client accounts on suspected ‘pump-and-dump’ scam

Hong Kong’s financial watchdog, the Securities and Futures Commission (SFC), has issued notices to two local brokers, instructing them to freeze certain client accounts suspected of market manipulation.

Retail FX

FSCS starts to offer LCF investors compensation under government scheme

The Financial Services Compensation Scheme (FSCS) has gone live with the government’s redress scheme to reimburse eligible London Capital & Finance victims.

Industry News

Aquis Exchange appoints Glenn Collinson as new Chair

Aquis Exchange, a group of companies that provide services for exchanges, has announced the appointment of Glenn Collinson as its new Chair and he would succeed Niki Beattie effective from January 1, 2022.

Digital Assets

Bitpanda onboards Lydia’s 5.5 million users to white label solution

Lydia has deployed the white label solution, with transactions made by the more than 5 million Lydia customers in a wide range of assets, from crypto to fractional stocks, being executed via Bitpanda for as little as EUR 1.

Digital Assets

Archax deploys Scila AB’s AML and surveillance tech for crypto trading

Scila is very much in tune with digital assets and cryptocurrencies and has some of the largest cryptocurrency exchanges and traders in its client roster.

Institutional FX, Retail FX

ATFX goes all in on US equities: FX broker adds 113 US stock CFDs

With the addition of 113 US stock CFDs, ATFX boasts more than  300 tradable instruments, 273 of which are stock CFD products.

Industry News

Citadel CEO outbids 17,000 crypto investors after winning Short Squeeze Lawsuit

Citadel Securities has been a key source of trading platforms’ revenue, which fed conspiracy theories that the US market maker leaned on their executives to end the short squeeze by restricting users from buying meme stocks.

<