Bitcoin Slipped to $7700 On Deribit Causing The Exchange Severe Losses
Bitcoin’s price has been trading around $9,100-$9,500 for a few days after the volatile movements of last week. However, on futures and options exchange Deribit, the price went through a violent red candle, reaching $7,700 in a manner of minutes and causing lots of losses. The company stated today that they will reimburse all affected users on their network.
Bitcoin Price Plunge on Deribit
The issue was noted around 21:00 UTC on October 31st and it reportedly affected many users on their exchange. The price of the largest cryptocurrency by market cap flash-crashed to $7,700 in just a few minutes, causing a serious amount of losses to the traders.
The company was quick to react, saying that they will be reimbursing a total amount of $1,3 million. They also added that “the Deribit Insurance fund will not be used to cover these losses, but compensation will be covered by Deribit”.
Just a few hours ago, the exchange confirmed that an approximate amount of 150 BTC has been issued back to everyone affected by the crash.
We have reimbursed all affected accounts. A total of ~150 BTC has been reimbursed by Deribit.
The insurance fund will remain unaffected and all reimbursement will be paid by Deribit Company reserves.Again, our sincerest apologies for all inconvenience caused.
— Deribit (@DeribitExchange) November 1, 2019
While the exact reason why this happened is not clear yet, according to some staff members, the problem lied in a “calculation data issue”.
Security and Safety on Exchanges
At the same time, one of the most well-known exchanges in the U.S., Coinbase Pro, may have experienced a similar problem yesterday. As per a popular Bitcoin analyst, Jacob Canfield, the order books appeared to be non-existent when the Deribit crash was occurring.
One of the most popular Bitcoin margin trading exchanges, BitMEX, had informed about updating the indices across all of their products on the 22nd of November. This move should ensure “the reference prices more closely reflect the market consensus” and trade contracts would be “even more optimized for fairness, robustness, and accuracy.”
While it’s unclear whether or not there was a serious connection among those actions, safety and security have always been an important part of every exchange. It might be even more crucial for traders to be further educated on Margin Trading because of the risks that it may contain.
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