- After suffering a failure in the platform’s algorithm, crypto exchange Binance registers a Bitcoin (BTC) price of $100,000 in future contracts.
- Binance will cover losses from users who were affected while trading in Ethereum derivatives.
The futures market at Binance recorded a Bitcoin price (BTC) of $100,000 briefly. Binance CEO Changpeng Zhao clarified that the rise to the referred price to was an error in the exchange platform, specifically in a user’s algorithm, that sent multiple orders that pushed Bitcoin futures past its all time high ($20,000). Zhao stated and shared the image below:
Another day in crypto. We do have price band protection, but a user’s something went ballistic and sent multiple orders to achieve this. We will likely have to adjust this chart a bit so that it’s readable in the future.
According to a Binance report, the events that led to the rise on Bitcoin’s future price began at 4:48am (UTC) on August 2. The user mentioned by Zhao placed a large number of orders in a very short period of time on the BTCUSD 0925 quarterly futures contract. This resulted in a candle wick rising to $99,964 and a stretch on the K-line of the chart for all quarterly futures users.
Impact of Binance failure on Bitcoin Price
At the time of publication there are no reports that the failure has had a negative impact on the users of the exchange. There are also no reports of auto-deleveraging. Binance outlined the following:
As Binance Futures uses the mark price as a reference in liquidations and calculations of unrealized NLP, the 99,964 USD wick and other extreme price movements during this period did not cause any liquidations in user positions
By contrast, they do report failures for other cryptocurrencies like Ethereum. The exchange reported a large fluctuation for the ETHUSDT perpetual contract and a delay in calculating the underlying perpetual position. The derivative was not synchronized with the ETHDOWN token. Although the failure was resolved, according to Binance, affected users who traded with the ETHDOWN token will be compensated. The exchange will take the following actions and has requested to send claims to the following email address, lvt@Binance.com:
All verified losses incurred by users trading the ETHDOWN BLVT token between 2020/08/02 4:43 AM (UTC) and 2020/08/02 5:22 AM (UTC) will be covered by Binance
A similar failure occurred on the crypto exchange BitMEX before “Black Thursday”. In fact, some analysts attributed to that failure the collapse of the market that made Bitcoin lose almost 50% of its price by that time and fall below $4,000. However, this time BTC has not been affected and, at the time of publication, is trading at $11,198 with losses of 0.72% in the last 24 hours. Ethereum also appears to have been unaffected and stands at $385 with modest gains of 2% in the last 24 hours.
Reactions in the crypto community have varied. Some users have taken advantage of the flaw to make jokes, while others made fraud reports. Bitcoin operator and co-founder of Blackroots, Josh Rager, said
$BTC to $100k and none of us got to take part in it. Scammed again.
