Arthur 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. (Updated at 14:54 UTC: updates in bold.)
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.
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:
WTF. FUCK YOU BITMEX. This is really not okay! My stop didn´t trigger and my entire bitmex account is fucking gone. Fuck you! pic.twitter.com/WHXbJoiTvL— Marc de Koning (@Koning_Marc) February 13, 2020
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."
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.”
"It's prudent to note that these high leverage XRP contracts are quite new to BitMEX and antagonistic comments from the CEO calling XRP dirty names has probably not attracted all that many clients. So the orderbook is likely quite sparse. If you have people selling and there are no buyers, the market price will then drop to the meet the next available buy order. It's simply how markets are designed," Mati Greenspan, founder of Quantum Economics, wrote in his newsletter on Friday.