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Binance futures market maker ‘attack’ turns out to be a bug

Binance futures market maker ‘attack’ turns out to be a bug

Binance almost became the victim of a market maker attack in the early hours of Sep. 16. However, CEO Changpeng Zhao soon revealed that the “attack” on the new futures platform was actually the result of a bug, causing the crypto-community to criticize him for making hasty accusations.

A “known” market maker allegedly attacks Binance

After officially opening for business on Friday, Sep. 13, the eyes of the crypto industry were pointed at Binance’s futures platform. While the weekend went on without any hiccups, the platform saw some serious drama as the workweek began.

Changpeng Zhao, the CEO of Binance, announced that a market maker tried to attack the futures platform. In a Twitter post, Zhao said that the attacker was a “market maker” from a small futures exchange, but that no one was liquidated.

Zhao shared a screengrab of the futures platform that showed Bitcoin futures briefly dropping from $10,324 to $10,042.

In a follow-up tweet, Zhao explained that a “well-known” account was responsible for the failed attack, adding that this was the second time such an attack was tried on Binance.

The alleged attacker didn’t manage to take advantage of the sudden price dip and force other Binance users to get liquidated. Zhao explained that this was prevented by the fact that Binance’s futures platform doesn’t use the futures price for liquidation, but the exchange’s own index price.

Market maker attack actually a bad parameter

However, Zhao has been known to be quick on the trigger when it comes to reactions and accusations, especially on Twitter, which is why most of his followers took the announcement with a grain of salt.

Many criticized him for posting harsh accusations without investigating the matter first, saying rash decisions like that made them trust Binance less.

It quickly turned out that the sudden drop in futures prices wasn’t the result of a malicious attack, but a consequence of a bug on the platform.

An hour after posting the original tweet, Zhao said that he had a chat with the client he suspected was responsible for the attack and found that it was an accident due to a “bad parameter on their side.”

While Zhao has been known to handle situations like these a bit more lighthearted than other exchange execs, few seemed to support the way he handled this.

Even Binance Coin (BNB) couldn’t stay immune to the drama—the exchange’s native token dropped 2.2 percent following the news.

Binance Coin | BNB

Updated: Sep 16 at 8:16 pm PDT
$20.28
-2.58%

Binance Coin, currently ranked #8 by market cap, is down 2.58% over the past 24 hours. BNB has a market cap of $3.15B with a 24 hour volume of $148.74M.

Chart by CryptoCompare

Binance Coin is down 2.58% over the past 24 hours.

Posted In: Binance, Hacks, People of Blockchain, Price Watch

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Priyeshu Garg
Author

Priyeshu Garg

Crypto Analyst @ CryptoSlate

Priyeshu is a software engineer who is passionate about machine learning and blockchain technology. He holds an engineering degree in computer science engineering and is a passionate economist. He built his first digital marketing startup when he was a teenager, and worked with multiple Fortune 500 companies along with smaller firms. When he is not solving transportation problems at his company (Ola), he can be found writing about the blockchain or roller skating with his friends.

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