FTX CEO: Bitcoin price might have gone to zero if BitMEX hadn’t gone offline FTX CEO: Bitcoin price might have gone to zero if BitMEX hadn’t gone offline
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FTX CEO: Bitcoin price might have gone to zero if BitMEX hadn’t gone offline

FTX CEO: Bitcoin price might have gone to zero if BitMEX hadn’t gone offline

Cover art/illustration via CryptoSlate

The CEO of Hong Kong-based crypto derivatives exchange FTX has speculated that if BitMEX had not gone offline on account of “hardware issues” Friday morning, the price of Bitcoin could have crashed to zero.

Sam Bankman-Fried, a.k.a. SBF, mused in a thread on Twitter Friday morning that BitMEX may have pulled their exchange offline out of fear their liquidation engine could collapse the XBTUSD order book all the way down to zero, under the false flag of hardware issues.

According to SBF, also the founder of crypto research firm Alameda, the BitMEX liquidation engine continuously drove Bitcoin down as it failed to liquidate enough BTC from leveraged long positions. SBF alleged the BitMEX order book was ten times too thin to balance the books, effectively creating a waterfall effect sending Bitcoin into a death spiral.

Suspicious timing

Just before Seychelles-based BitMEX went offline the price of XBTUSD crashed 10 percent below the spot price and the funding rate collapsed to one of its lowest levels on record. Shortly after, Bitcoin staged a sharp reversal to the upsideโ€”dubiously during the 40-minute window the leveraged derivatives giant was offline.

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Related Reading: BitMEX freezes as XBTUSD crashes 10% below Bitcoin spot priceย 
SBF pointed to the timing of this rally, saying that the outage took BitMEX’s momentous sell wall off the market and allowed Bitcoin to recover. Stunningly, he also suggested the BitMEX team themselves may have deliberately shuttered trading in order to prevent further collapse and to avoid having to dip into the exchange insurance fund.

While figures are yet to be released by BitMEX, there are allegations the fund may have lost more than 2,000 BTC in the lead-up to the crash. As of Thursday, the fund’s balance stood at 33,881.2 BTC.

BitMEX responded to SBF’s allegation on Twitter, rejecting it as a “conspiracy theory,” and that in fact the exchange had been prepared for such an event.

Atlanta-based mining outfit BitPico has drawn an even more grave conclusion, alleging the waterfall had been engineered by BitMEX. Without providing evidence, the BitPico group claimed BitMEX had used their own “bots and capital” to liquidate $993 million worth of long positions.

BitMEX is by orders of magnitude the largest unregulated Bitcoin derivatives in terms of trading volume, and it has been blamed a number of times for exacerbating declines in the price of BTC on account of its mass liquidations.

At the time of press, Bitcoin is ranked #1 by market cap and the BTC price is up 3.11% over the past 24 hours. BTC has a market capitalization of $130.34 billion with a 24-hour trading volume of $32.89 billion. Learn more ›


22 Apr at 10:32 pm UTC



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At the time of press, the global cryptocurrency market is valued at at $205.49 billion with a 24-hour volume of $122.22 billion. Bitcoin dominance is currently at 63.47%. Learn more ›