Former Alameda Research Employee: The 87% Plunge of BTC on Binance.US in 2021 May Be Due to Alameda Trader's Operational Mistake

2023-09-21 16:50:38

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ChainCatcher news, according to CoinDesk, former Alameda Research employee Baradwa revealed that the 87% instant drop of BTC on Binance.US in 2021 may have been caused by a trading error from an Alameda trader.

While most Alameda trades are executed using algorithms, sometimes traders can manually send orders or take advantage of profit opportunities during market fluctuations, which is why obvious mistakes can occur.

One Alameda trader attempted to sell Bitcoin in response to news and sent an order through a manual trading system. Due to a misplacement of the decimal point, they did not sell Bitcoin at the current market price, but rather at a fraction of the price. Arbitrage traders quickly took advantage of the mispricing, resulting in millions of dollars in losses for Alameda.

It is reported that on October 21, 2021, while other markets were operating normally, BTC on Binance.US plummeted within minutes, dropping from around $65,760 to a low of $8,200 at 11:34 AM that day, before quickly rebounding back to previous levels. A Binance.US spokesperson stated at the time that the drop was due to a flaw in the trading system of one of their "institutional traders."

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