Bitcoin crashed to $6k in Southeast Asian exchange PDAX due to order mismatch
In an apparent glitch caused by an order mismatch on February 16, Bitcoin crashed to $6000, allowing investors to scoop up thousands of Bitcoins at a huge discount. PDAX is asking for the Bitcoins back.
The exchange had to suspend trading and restrict users from accessing their accounts for 36 hours. On Tuesday, PDAX CEO, Nichel Gaba held a press conference to clarify what had happened. He explained that a burden was placed on the exchange by a flurry of unanticipated activity which introduced a glitch that allowed an unfunded order to be matched with a funded order. According to him, this led to a cascade effect that dropped the price of BTC below reasonable levels.
A number of users where able to withdraw their Bitcoins before their accounts where suspended. Some even sent their Bitcoins to other wallets bypassing the 24 hour daily withdrawal limit of 1 BTC on Bitcoin.
One user that was able to transfer his bitcoin asked for guidance on a subreddit, r/phinvest on what he should do about the situation amid legal threats from PDAX.
“I managed to transfer the purchased BTC to another wallet outside PDAX just before they closed the trading and eventually the website, after almost 24 hours, they sent me a demand letter and SMS, requesting me to transfer back the BTC, which was purchased well within my rights without violating any laws or regulations of the trading platform, or they ‘may’ be compelled to take legal actions against me.”
Some users claim that they are still not able to log in to their account as at Monday 22nd of February, even as Gaba stressed that only 0.2% can’t access their accounts.
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Victor Nnadi is an Independent Economics Researcher and a Securities Trader.