While the leading cryptocurrency Bitcoin was experiencing a correction after the FED decision, a new claim was made about BTC.
A former employee of Alameda Research, which went bankrupt along with FTX in November 2022, claimed in his post on Twitter that the 87% decline of Bitcoin on Binance US on October 21, 2021 was due to Alameda Research.
In his post, the former employee of Alameda, who uses the name Aditya Baradwaj on Twitter, claimed that a trader at the company entered an incorrect decimal number, which caused Bitcoin to fall by 87% on Binance.US in 2021.
At this point, Baradwaj said that most Alameda transactions are carried out using algorithms, but manual orders can also be entered when the market is volatile.
At this point, it was stated that the Alameda trader entered the order manually and made a mistake while doing so, and this mistake caused BTC to drop by 87% in Binance US.
“This incident happened just a few weeks after I joined Alameda.
I had just gotten used to our engineering workflows and was starting to look into our trading systems.
There were two styles of trading in Alameda: The most important of these operated semi-automatically. In this system, traders would not trade, algorithms would handle the buying and selling. But occasionally a trader would need to submit a transaction manually.
Manual entry would usually happen if our automated trading systems were problematic due to volatility in the market or when there was too much volatility.
Here a former Alameda trader who was a manual trader was trying to sell a block of BTC and sent the order through our manual trading system. Here, the decimal place was wrong and there was a huge BTC drop and the company suffered serious losses. The loss was in the tens of millions of dollars.
However, this person honestly admitted his mistake. Therefore, there wasn't much that could be done other than a few mental health checks on the employee.
For almost two years, the BTC flash crash incident remained a mystery in the public's mind. But now you know who's responsible and what's going on behind the scenes.”
Here's Part 2!https://t.co/DusugiYLlN
— Adi (e/acc) (@aditya_baradwaj) September 20, 2023
What Happened?
As you may remember, on October 21, 2021, Bitcoin suddenly dropped to $ 8,200 on Binance US in about 1 minute.
Speaking to Bloomberg, a Binance US spokesperson said that one of the institutional investors experienced a systemic error in the trading algorithm, which caused the sale.
Although the stock exchange spokesman stated that the problem was resolved, he did not disclose who the institutional investor was.
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*This is not investment advice.
