Bitcoin Slipped to $7700 On Deribit, Causing the Exchange Severe Losses

Bitcoin’s price has been trading around $9,100-$9,500 for a few days after the volatile movements of last week. However, on futures and options exchange Deribit, the price saw a violent red candle, falling to $7,700 in a matter of minutes and causing lots of losses. The company stated today that it would reimburse all affected users.

Bitcoin Price Plunges on Deribit

The issue was noted around 21:00 UTC on October 31st, and it reportedly affected many users on the exchange. The price of the largest cryptocurrency by market cap flash-crashed to $7,700 in mere minutes, causing significant losses for traders.

The company was quick to react, saying that it would be reimbursing customers to the tune of $1.3 million. It added that “the Deribit Insurance fund will not be used to cover these losses, but compensation will be covered by Deribit.”

Just a few hours ago, the exchange confirmed that approximately 150 BTC had been issued to affected users.

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

While the exact reason why this happened is not yet clear, according to some staff members, the problem lied in a “calculation data issue”.

Security and Safety on Exchanges

One of the most well-known exchanges in the US, Coinbase Pro, may have also experienced a similar problem yesterday. According to a popular Bitcoin analyst, Jacob Canfield, its order books appeared to be non-existent when the Deribit crash was occurring.

One of the most popular Bitcoin margin trading exchanges, BitMEX, has announced that it will update its indices on the 22nd of November. The move should ensure that “the reference prices more closely reflect the market consensus” and trade contracts would be “even more optimized for fairness, robustness, and accuracy.”

While it’s unclear whether or not these actions were connected, safety and security have always been an important part of every exchange. It might be even more crucial nowadays for traders to be educated on margin trading because of the risks that it contains.