BitMEX CEO’s Jokes About XRP End With a Flash Crash and a Wall of SilenceArthur Hayes. Source: a video screenshot, Youtube, CfC st. Moritz

The normally outspoken CEO of major crypto derivatives exchange BitMEX, Arthur Hayes, has gone quiet after a short-lived crash occurred in the exchange’s XRP derivatives market, which may have led to large losses for some traders on the platform.

The sudden crash occurred at 14:00 UTC on Thursday when the price of BitMEX’s XRP/USD perpetual swap contract dropped from USD 0.33 to USD 0.13, a fall of nearly 60%. However, everything was over in a matter of seconds, and the price was back up again at USD 0.33 as the next 1-minute candle appeared on the chart.

BitMEX CEO’s Jokes About XRP End With a Flash Crash and a Wall of Silence1-minute chart of BitMEX’s XRP/USD perpetual swap contract. Source: www.tradingview.com

The sudden crash and subsequent recovery could suggest that it was triggered by a glitch in a trading algorithm, or a by a large whale with a so-called “fat finger,” meaning someone wrongly entering a very large order. As of yet, however, no word has been heard from BitMEX or Arthur Hayes in public about the incident.

Several BitMEX clients have already taken to Twitter to express their frustration about the event, with some even claiming that their stop-loss orders – used as protection in case of sudden market drops – did not get triggered at the prices they were supposed to during the crash:

The trader also shared a screenshot that looks like a response from BitMEX that says that they "understand that price movements like this can be frustrating at times, however, there will be no rollback or refunds in this case." The exchange allegedly claims that their "stops and systems generally have performed as designed."

BitMEX CEO’s Jokes About XRP End With a Flash Crash and a Wall of Silence

Meanwhile, as reported this week, Poloniex rolled back 12 minutes of trading history after a bug detected in the system caused trades to be “executed erroneously,”

Jake Chervinsky, general counsel at decentralized finance platform Compound, also weighed in, writing: “If BitMEX were a US-regulated exchange, this would likely warrant a conversation with someone at the CFTC [the Commodities Futures Trading Commission] at minimum, if not a full internal investigation to determine how the flash crash occurred.”

“That won’t happen. I wonder if BitMEX will even respond. This is crypto in 2020,” Chervinsky added.

We have contacted BitMEX for comment and will update the article should they reply.

Watch the latest reports by Block TV.

Interestingly, yesterday’s flash crash came shortly after XRPUSD perpetual contracts were listed on BitMEX, when Arthur Hayes used the listing announcement as an opportunity to mock the asset, writing on Twitter: “Is it called Ripple, XRP, or dogshit? Who knows, who cares. It’s worth more than zero so it’s time to trade the USD pair on BitMEX. Boo-Yaka-sha!”

Shortly after, he also offered a piece of advice to traders, which appeared to suggest that more people should short XRP.

The BitMEX flash crash serves as a reminder of the dangers associated with trading with high leverage, as the common practice is on derivatives exchanges like BitMEX. It’s important to realize that derivatives trading using leverage is always a highly risky endeavor, which should only be done by very experienced traders. Without special expertise in trading, a robust trading strategy, and proper risk management techniques, most traders would probably be better off sticking with the regular spot market, where things are generally safer.

As of pixel time on Friday (11:39 UTC), XRP is trading at USD 0.324, up 4% in the past 24 hours snf 14.6% in a week.
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Learn more:
BitMEX and Arthur Hayes Now Have USD 300 Million Problem
Malicious Groups Collated Leaked Crypto Trader Data – BitMEX

Posted by George Harrison

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