“No Rollbacks”: BitMEX Says After 62% XRP Flash Crash

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Red Crash Price Crypto

Earlier this month, leading cryptocurrency derivatives exchange BitMEX finally added a financial vehicle for XRP’s pair against USD, the Ripple quanto swap, which allows for traders to trade the popular altcoin with large amounts of leverage.

Although market participants across the board were quite pleased with this addition, traders quickly became displeased with the product on Thursday when XRP saw a “flash crash” on the exchange, with the asset’s price plunging by 50% in a few minutes’ time.

BitMEX’s XRP Market Flash Crashes, Enraging Traders

After trending higher for a number of days in a row, XRP traders were in for an unexpected and unfortunate surprise on Thursday, when the price of the asset fell around 60% from $0.30 to $0.13,  falling through key support levels as if they were nothing more than soggy pieces of paper.

61% XRP Price Flash Crash Leaves Traders Confused and Dazed 1


The price of XRP stayed relatively flat on other exchanges, not falling below the key $0.30 price point as they did on BitMEX, as the asset whipsawed back to its $0.30 trading range just minutes later.

Despite the asset trading around $0.13 for a few minutes at best, traders have been left to pick up the pieces of this flash crash, which comes in the earliest stages of the next bull cycle.

Prominent market commentator and trader Marc de Koning wrote that

“This is really not okay! My stop didn’t trigger and my entire BitMEX account is f**king gone,”

before urging others in the community to spread awareness about this debacle.” Notably, Koning didn’t provide proof of the lost funds, but many cryptocurrency community members (at least 3,000 as of the time of writing this) on Twitter have picked up his story as fact.

Since his original tweet, the investor has continued to try and raise awareness about his purported issue.

Blockonomi could not identify other traders online affected by the sudden move.

The outrage has been echoed by others in the community, even those not directly affected by the event.

Prominent cryptocurrency trader SmartContracter wrote that after this “scamwick,” he doesn’t think he will “ever trade XRP perpetual swaps on BitMEX after that,” adding that he hopes the CEO of the exchange will “dig into the insurance fund to compensate people whose stops didn’t go off.”

This was echoed by Bitazu Capital’s Mohit Sorout, who wrote in response to the tweet from Koning regarding the loss that “this shouldn’t have happened” due to BitMEX’s implementation of a system called  “Fair Price Marking,” which should “avoid unnecessary liquidations in its highly leverage products.”

Unfortunately, per a message Koning shared that he claims is from BitMEX, the exchange will not be reimbursing the funds:

“We are aware of the price movement… This caused a number of users’ stop orders to execute as they were set to trigger on the last traded price, not the mark or index price… We have determined that our stops and systems generally have performed as designed. The volume of stops executing, coupled with a lack of liquidity on the order book caused the price to run. [… H]owever, there will be no rollbacks or refunds in this case,” the purported communique read.

Crypto Lawyer Weighs In

Jake Chervinsky, counsel at Ethereum decentralized finance application Compound, has weighed in on the situation.

In response to Koning’s fiery tweet on the subject, Chervinsky wrote that if “BitMEX were a US-regulated exchange, this would likely warrant a conversation with someone at the CFTC at minimum, if not a full internal investigation to determine how the flash crash occurred.”

Price Crashes Not Abnormal

Notably, price crashes aren’t abnormal in crypto markets (or even in massive stock markets, where prices can drop 10% in minutes due to algorithm errors).

Per previous reports from Blockonomi, Kraken’s BTCCAD pair fell from CAD$11,200 to CAD$101 in a few seconds in 2019.

Also, back in the bull run, the price of Ethereum fell by dozens of percent in seconds in a now-infamous flash crash.

The post “No Rollbacks”: BitMEX Says After 62% XRP Flash Crash appeared first on Blockonomi.