Some traders on Deribit, a BitMEX competitor that offers leveraged crypto derivative products, had their Bitcoin perpetual swap positions liquidated on Thursday after the platform’s Bitcoin (BTC) index experienced an erroneous flash crash at 5:00 PM EST.
“[The] cause of this incident was one platform providing incorrect prices that should have been removed as an outlier in the index calculation,” stated Deribit in a recent announcement. “We have suspended this platform from the index calculation.”
While Deribit did not specify which exchange was responsible for the faulty calculation, some have speculated that Coinbase Pro was the cause as reports claim the exchange was down for a period before the crash and it’s one of the seven exchanges used by Deribit to calculate Bitcoin’s price.
In response, Deribit has compensated clients that were negatively impacted by the faulty liquidations and stop-losses, which amounted to over $1.3 million in losses, and apologized for the incident.
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
Nonetheless, some traders have complained that reimbursing liquidated positions does not provide a full refund, as it does not compensate for slippage and funding interest.
Disclaimer: This article’s author has cryptocurrency holdings that can be tracked here. This article is for informational purposes only and should not be taken as investment advice. Always conduct your own due diligence before making investments.