- “Flash Crash” hit cryptocurrencies NEO, OMG, and ETP on the Bitfinex exchange on Wednesday.
- Price drop triggered exchange to liquidate many customers’ leveraged positions, leaving some with thousands of dollars in losses.
- Customers claim the orders weren’t executed correctly and the platform was hit by technical glitches. Many are demanding refunds.
- Bitfinex claims everything occurred as it should.
- The incident highlights the high-risk nature of the unregulated and volatile cryptocurrency space.
A “flash crash” on the world’s biggest cryptocurrency exchange has left customers demanding answers and refunds, with many claiming to have lost thousands of dollars.
The price of cryptocurrencies NEO, OMG, and ETP crashed as much as 90% in minutes on the Bitfinex exchange on Wednesday before quickly bouncing back to former levels.
The price crash led Bitfinex, the world’s largest cryptocurrency exchange by daily volume, to close the positions of many traders who had placed leveraged bets on these digital currencies. Lveraged trading involves borrowing money to increase exposure. It can lead to outsized gains compared to how much you deposit, but also outsized losses.
They claim that Bitfinex’s platform was hit by delays and technical issues at the time of the “flash crash,” leaving many powerless to respond. Traders are also upset that the crash only appeared to happen on Bitfinex and are suspicious of what caused it. And many say stop losses — automated sell orders meant to activate once an asset price reaches a certain floor and therefore limit losses — were executed at prices well below those set by users.
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