A representative of a cryptocurrency platform named the reason for the 88% collapse of bitcoin

A former Alameda Research employee has spoken publicly about the deal that caused the flagship cryptocurrency’s rate to plummet by 88% in 2021. According to Aditya Baradwaj, a failure on the Binance.US exchange caused a sharp drop in the HTC. It was triggered by a trader’s mistake that went bankrupt along with the FTX crypto exchange of the Alameda Research fund.

on October 21, 2021, the BTC $60,556.40 Bitcoin -3.29% Market capitalization $1.19 trillion VOL. 24 hours $1.47 billion rate on the Binance.US crypto exchange instantly plummeted by 88% to $ 8200. Some time later, the value of the cryptocurrency returned to its previous levels of about $ 65,000. The collapse occurred within a few minutes for no apparent reason, while other exchanges did not experience such a drop.

At the time, a representative of the exchange told Coindesk that the collapse was due to «errors in the trading system of one of the institutional traders.» The identity of this trader remained a mystery, but Baradwaj claims that Alameda Research was involved.

According to him, most of Alameda’s trades were executed algorithmically, but there were cases when traders manually sent orders during periods of market volatility. «A trader was trying to sell a batch of bitcoins in response to news and sent an order through our manual trading system. He did not notice that the sign between the digits had shifted by several characters. Instead of selling the bitcoins at the current market price, he sold them for a penny,» said Aditya Baradwaj on Platform X.

Arbitrage traders quickly took advantage of the mistake and restored the price of bitcoin on the exchange to the current market level, but Alameda lost millions of dollars, Baradwaj wrote. Shortly after FTX’s bankruptcy, former Alameda Research CEO Caroline Allison admitted that she and FTX co-founder Сем Бенкман-Фрід" href="https://noworries.news/biography/sem-benkman-frid/" data-bio-id="3697">Sam Bankman-Fried deliberately misled investors about financial fraud at her fund and FTX. According to her, she was aware of the illegality of such actions.

As for the FTX founder’s condition, Sam Bankman-Fried's lawyers have filed a motion for his release from prison, arguing that poor internet access is a significant obstacle to preparing for the upcoming trial. District Court Judge Lewis Kaplan denied the motion for temporary release on September 12, stating that poor internet access was not a sufficient basis for release.

Currently, Benkman-Fried faces 12 criminal charges, which will be considered at two trials scheduled for October 2, 2023 and March 11, 2024. He has pleaded not guilty to any of the charges.