Coinbase Pro's ETH Flash Crash Reminds Us How Dangerous the Crypto Space Can Be

The price of Ethereum has suffered a flash crash, falling from $100 to $13 in a matter of seconds. The flash crash happened on Coinbase Pro exchange (formerly known as the GDAX).

The price returned to normal shortly after it fell, as arbitrage makers lifted the price back to $100. It appears the anomaly only affected the ETH/USDC trading pair (USDC is a new stable coin based on the US dollar and created by Circle).

Many traders reported the situation on social media. While the majority were perplexed by the whole situation and just wanted answers, some lucky traders took the opportunity to brag about their newly acquired Ether.

 

This isn’t the first time something like this happened. Last year, Ethereum also experienced a flash crash on Coinbase Pro. That time, the cryptocurrency's price plummeted from $319 to $0.10 in a few seconds and traders were eventually refunded for their losses. Here is a video of the flash crash happening live.

That incident saw Coinbase's platform, then known as GDAX, stop offering margin trading as the crash was partly feueled by margin positions getting liquidated. Behind the crash was a multi-million dollar sell order.

What Caused The Flash Crash?

Coinbase has since released a statement on Twitter addressing the issue:

It seems that, according to Coinbase, the unusual trading activity was not caused by a system failure. If that is the case, the speculated cause for the flash crash was a manually placed sell order.

It is possible that the massive sell order was caused by an initial coin offering (ICO) cashing out its ether funds, or that it was unintended, as it might have been a crypto whale trying to cash out quickly. Either way, if the flash crash is proven to have been triggered by traders, then Coinbase most likely won’t be issuing any refunds this time.

After falling bellow $100 yesterday, Ethereum is currently being traded at $86.11 and is down 12.02% over the last 24 hours, according to data from CryptoCompare.

Although most weren’t affected by the flash crash, it brings back memories of a recent episode from crypto exchange Bitstamp, in which a bot “went wild” and saw the price of various cryptocurrencies swing wildly.

Bottom line, this is still a nascent industry where some of the things we’re protected against in traditional markets haven’t yet been properly implemented just yet. To stay safe a lot is needed and, as such, understanding exactly what we’re dealing with is important.

As CryptoGlobe covered, cryptocurrency exchange Bithumb reached the number one spot by trading volume without having the highest number of users through “incentivized trading.” On some of its trading pairs the volume quickly disappeared.

While Coinbase and Bitstamp appear to be trustworthy exchanges, they still suffer from time to time. The best way to keep your funds safe is to withdraw them from these platform when you aren’t using them, so you can control the private keys of the wallets they’re in yourself.

Ethereum's price in the last 24 hours.

OKEx Milestone: A Year Since Launch of Its OKB Utility Token

  • OKEx's head of operations explains why OKB's 1 year anniversary is signficant. 
  • Official company blog post details how OKB is expected to go live on OKChain, as the exchange operator gets set to launch its own DEX.

OKEx, a leading Hong Kong-registered and Malta-operated digital asset exchange, has announced that it has reached an important milestone. Notably, it has now been more than a year since OKEx introduced its globally accessible utility token, called OKB.

Launched on March 22, 2018, OKEx’s management has worked on various initiatives related to the OKB token, presumably to increase its utility. As detailed in an official Medium blog post from OKEx, there are several important facts that investors must know about the exchange’s OKB token.

OKChain To Launch In June 2019

At present, the OKB token, which is currently trading at around $1.38 according to CryptoCompare data, has not been integrated on a blockchain network. As explained by OKEx’s management in a press release shared with CryptoGlobe, OKB will be incorporated on OKChain by June 2019. Notably, OKChain is a blockchain platform being developed by OKEx’s in-house software architects and it is reportedly in its final stages of development.

However, the OKB token will first be launched on the Ethereum network in late April of this year and will be ERC-20 compliant. Presumably, this is being done in order to ensure that the OKB cryptocurrency works as intended when finally integrated on OKChain.

Andy Cheung On Key Milestone For OKEx

Commenting on the key milestone, Andy Cheung, the head of operations at OKEx, remarked:

We would take a sincere gratitude to thank all the 1 million OKB holders who contributed to the ... $15.6 billion [in] OKB trading volume in the past year. This marks an important milestone that OKB starts to blossom after setting up a concrete foundation.

Cheung, an information technology and e-commerce graduate from South Africa’s Bond University, added:

It is simple in OKEx, we strive to be a trendsetter and commit to building a robust blockchain ecosystem with traders. With such [a positive] result, we feel stronger [and more confident in] driving the advancement of the blockchain and digital assets industry.

OKB To Be Used For Token Pre-Sales 

As noted in OKEx’s blog, the exchange operator is looking to further expand its line of products and services in the blockchain ecosystem by launching a decentralized exchange (DEX) on the OKChain platform. Moreover, the company’s official blog revealed that the OKB token will be used for facilitating “token pre-sales."

Currently, there are around 300 million OKB tokens that have been issued, while the maximum supply of the deflationary digital asset stands at 1 billion. Explaining the token issuance process OKEx’s management confirmed that there are presently “700 million OKB [that have been] locked up.”

OKEx JumpStart, Based On Initial Exchange Offering Model

Notably, 300 million OKB will be gradually distributed to OKEx exchange users through the company’s loyalty program. The remaining 400 million OKB will reportedly remain reserved for the OK Blockchain Foundation and the firm’s operations team members.

In a move that’s similar to Binance and it’s newly launched “Binance Launchpad,” OKEx has also adopted the initial exchange offering (IEO) model when it comes to helping blockchain startups launch new tokens into the digital asset market. OKEx’s version of the seemingly popular IEO model is called “OKEx Jumpstart.”