Bitcoin Flash Crash Causes $200m Liquidation on BitMEX
- BTC prices suddenly dropped overnight by 15%, after another NY court order related to Bitfinex and Tether

Just as the mood across cryptocurrency markets was striking an upbeat tone, a sharp turnaround last night flipped a switch. A flash crash in the price of Bitcoin allegedly starting with a big sell order transacted via the Bitstamp exchange crashed any positive sentiment that had built up before.

Flash Crash Market Making Challenge
The selloff started at Bitstamp with over 5,000 bitcoin being exchanged between 03:45 and 04:15 London time. The lowest print on the exchange was at $6,178. Speculation that the main reason for the crash of prices on Bitstamp is the 50% share of the price formation on BitMEX.
The high leverage used by traders on BitMEX is prompting sharp market moves that are wiping out holders of derivatives contracts purchased using leverage as high as 1:100. While regulated retail brokers are less exposed, the events show that despite the development of the crypto market over the past several years, risks of sharp and unexpected moves remain ample.
Bitfinex and Tether Saga Continues
Last night The Supreme Court of New York ordered Tether to stop loaning money to Bitfinex. The embattled cryptocurrency trading venue has been experiencing financial difficulties after its partnership with a Panama-based firm called Crypto Capital went south.
Bitfinex has been attempting to get its finances on track, with the latest batch of news focused on launching its own Initial Exchange Offering (IEO) Initial Exchange Offering (IEO) An Initial Exchange Offering, or IEO, is a method of fundraising in which a cryptocurrency company issues and sells tokens through a cryptocurrency exchange. Unlike Initial Coin Offerings (ICOs), an IEO is instead administered by a crypto exchange on behalf of the startup that is looking to raise funds with its newly issued tokens.As such, an investor must make an account on the exchange that is holding the token sale and send cryptocurrency into that account. Therefore, the Know-Your-Customer (KYC) checks that occur when a user makes an account on an exchange also apply to the token sale.Since a token sale is conducted on the exchange’s platform, token issuers also are responsible for paying a listing fee along with a percentage of the tokens sold during the IEO. In return, the tokens of the crypto startups are sold on the exchange’s platforms, while their coins are listed after the IEO is over. As the crypto exchange takes a percentage of the tokens sold by the startup, the exchange is incentivized to help with the token issuer’s marketing operations. Overall, IEO participants do not send contributions to a smart contract, as is the case with an ICO. Rather, they have to create an account on the exchange’s platform where the IEO is conducted. The contributors then fund their exchange wallets with coins and use those funds to buy the fundraising company’s tokens.Are IEOs the Future?IEOs are generally considered to be a safer method of investing than ICOs because of the fact that cryptocurrency exchanges take care of due diligence for investors. Projects are thoroughly vetted before they can be eligible for an IEO. Because an exchange’s reputation hinges on the fact that the token sales that they facilitate are legitimate, investors in IEOs can enjoy a higher level of confidence in the tokens that are bought through IEOs than ICOs. However, investors are highly recommended to do their own thorough research. An Initial Exchange Offering, or IEO, is a method of fundraising in which a cryptocurrency company issues and sells tokens through a cryptocurrency exchange. Unlike Initial Coin Offerings (ICOs), an IEO is instead administered by a crypto exchange on behalf of the startup that is looking to raise funds with its newly issued tokens.As such, an investor must make an account on the exchange that is holding the token sale and send cryptocurrency into that account. Therefore, the Know-Your-Customer (KYC) checks that occur when a user makes an account on an exchange also apply to the token sale.Since a token sale is conducted on the exchange’s platform, token issuers also are responsible for paying a listing fee along with a percentage of the tokens sold during the IEO. In return, the tokens of the crypto startups are sold on the exchange’s platforms, while their coins are listed after the IEO is over. As the crypto exchange takes a percentage of the tokens sold by the startup, the exchange is incentivized to help with the token issuer’s marketing operations. Overall, IEO participants do not send contributions to a smart contract, as is the case with an ICO. Rather, they have to create an account on the exchange’s platform where the IEO is conducted. The contributors then fund their exchange wallets with coins and use those funds to buy the fundraising company’s tokens.Are IEOs the Future?IEOs are generally considered to be a safer method of investing than ICOs because of the fact that cryptocurrency exchanges take care of due diligence for investors. Projects are thoroughly vetted before they can be eligible for an IEO. Because an exchange’s reputation hinges on the fact that the token sales that they facilitate are legitimate, investors in IEOs can enjoy a higher level of confidence in the tokens that are bought through IEOs than ICOs. However, investors are highly recommended to do their own thorough research. Read this Term). Those plans, however, have been scrapped in light of the investigations against the firm.
Just as the mood across cryptocurrency markets was striking an upbeat tone, a sharp turnaround last night flipped a switch. A flash crash in the price of Bitcoin allegedly starting with a big sell order transacted via the Bitstamp exchange crashed any positive sentiment that had built up before.

Flash Crash Market Making Challenge
The selloff started at Bitstamp with over 5,000 bitcoin being exchanged between 03:45 and 04:15 London time. The lowest print on the exchange was at $6,178. Speculation that the main reason for the crash of prices on Bitstamp is the 50% share of the price formation on BitMEX.
The high leverage used by traders on BitMEX is prompting sharp market moves that are wiping out holders of derivatives contracts purchased using leverage as high as 1:100. While regulated retail brokers are less exposed, the events show that despite the development of the crypto market over the past several years, risks of sharp and unexpected moves remain ample.
Bitfinex and Tether Saga Continues
Last night The Supreme Court of New York ordered Tether to stop loaning money to Bitfinex. The embattled cryptocurrency trading venue has been experiencing financial difficulties after its partnership with a Panama-based firm called Crypto Capital went south.
Bitfinex has been attempting to get its finances on track, with the latest batch of news focused on launching its own Initial Exchange Offering (IEO) Initial Exchange Offering (IEO) An Initial Exchange Offering, or IEO, is a method of fundraising in which a cryptocurrency company issues and sells tokens through a cryptocurrency exchange. Unlike Initial Coin Offerings (ICOs), an IEO is instead administered by a crypto exchange on behalf of the startup that is looking to raise funds with its newly issued tokens.As such, an investor must make an account on the exchange that is holding the token sale and send cryptocurrency into that account. Therefore, the Know-Your-Customer (KYC) checks that occur when a user makes an account on an exchange also apply to the token sale.Since a token sale is conducted on the exchange’s platform, token issuers also are responsible for paying a listing fee along with a percentage of the tokens sold during the IEO. In return, the tokens of the crypto startups are sold on the exchange’s platforms, while their coins are listed after the IEO is over. As the crypto exchange takes a percentage of the tokens sold by the startup, the exchange is incentivized to help with the token issuer’s marketing operations. Overall, IEO participants do not send contributions to a smart contract, as is the case with an ICO. Rather, they have to create an account on the exchange’s platform where the IEO is conducted. The contributors then fund their exchange wallets with coins and use those funds to buy the fundraising company’s tokens.Are IEOs the Future?IEOs are generally considered to be a safer method of investing than ICOs because of the fact that cryptocurrency exchanges take care of due diligence for investors. Projects are thoroughly vetted before they can be eligible for an IEO. Because an exchange’s reputation hinges on the fact that the token sales that they facilitate are legitimate, investors in IEOs can enjoy a higher level of confidence in the tokens that are bought through IEOs than ICOs. However, investors are highly recommended to do their own thorough research. An Initial Exchange Offering, or IEO, is a method of fundraising in which a cryptocurrency company issues and sells tokens through a cryptocurrency exchange. Unlike Initial Coin Offerings (ICOs), an IEO is instead administered by a crypto exchange on behalf of the startup that is looking to raise funds with its newly issued tokens.As such, an investor must make an account on the exchange that is holding the token sale and send cryptocurrency into that account. Therefore, the Know-Your-Customer (KYC) checks that occur when a user makes an account on an exchange also apply to the token sale.Since a token sale is conducted on the exchange’s platform, token issuers also are responsible for paying a listing fee along with a percentage of the tokens sold during the IEO. In return, the tokens of the crypto startups are sold on the exchange’s platforms, while their coins are listed after the IEO is over. As the crypto exchange takes a percentage of the tokens sold by the startup, the exchange is incentivized to help with the token issuer’s marketing operations. Overall, IEO participants do not send contributions to a smart contract, as is the case with an ICO. Rather, they have to create an account on the exchange’s platform where the IEO is conducted. The contributors then fund their exchange wallets with coins and use those funds to buy the fundraising company’s tokens.Are IEOs the Future?IEOs are generally considered to be a safer method of investing than ICOs because of the fact that cryptocurrency exchanges take care of due diligence for investors. Projects are thoroughly vetted before they can be eligible for an IEO. Because an exchange’s reputation hinges on the fact that the token sales that they facilitate are legitimate, investors in IEOs can enjoy a higher level of confidence in the tokens that are bought through IEOs than ICOs. However, investors are highly recommended to do their own thorough research. Read this Term). Those plans, however, have been scrapped in light of the investigations against the firm.