The ‘honest’ mistake did eventually cost Alameda some millions of dollars. An individual simply identified as Baradwaj has dropped a bombshell of an accusation on his former employer Alameda Research. According to him, Alameda, which was owned by Sam Bankman-Fried, played a prominent role in the downward spiral of Bitcoin (BTC) that saw its prices plunge over 87% on Binance.US within minutes. This was back in 2021. At the time, BTC’s price dipped to as low as ,200 from around ,760, albeit in a manner that could not be immediately explained. Although the price quickly bounced back up to around where it was before the fall, Baradwaj now claims that the dip did not just happen. He claims that it stemmed from a mistake that a trader at the firm made on October 21, 2021, which saw them
Topics:
Mayowa Adebajo considers the following as important: Alameda, alameda research, Bitcoin News, bitcoin price, BTC, btc prie, btcusd, Cryptocurrency News, News, SBF
This could be interesting, too:
Chimamanda U. Martha writes OSL Strengthens Partnership with Solomon JFZ Ahead of Hong Kong ETF Launch
Temitope Olatunji writes Japanese Metaplanet’s Purchase of Bitcoin Worth .25M Signals Growing Corporate Adoption
Godfrey Benjamin writes Here Are 3 Major Recent Cardano (ADA) Upgrades to Know
Steve Muchoki writes BNY Mellon Invests in Spot Bitcoin ETFs from BlackRock and Grayscale
The ‘honest’ mistake did eventually cost Alameda some millions of dollars.
An individual simply identified as Baradwaj has dropped a bombshell of an accusation on his former employer Alameda Research. According to him, Alameda, which was owned by Sam Bankman-Fried, played a prominent role in the downward spiral of Bitcoin (BTC) that saw its prices plunge over 87% on Binance.US within minutes. This was back in 2021. At the time, BTC’s price dipped to as low as $8,200 from around $65,760, albeit in a manner that could not be immediately explained.
Although the price quickly bounced back up to around where it was before the fall, Baradwaj now claims that the dip did not just happen. He claims that it stemmed from a mistake that a trader at the firm made on October 21, 2021, which saw them punch in a wrong decimal.
The incident meant that the Binance.US users who were trading Bitcoin on the crypto exchange were immediately thrown into confusion as they hurriedly scampered around after seeing their assets plunge so much within a few minutes. Even more worrisome on the day, was that other Bitcoin markets continued operating normally.
At the time, Binance.US concluded that the incident was a result of a bug in the trading systems of one of their “institutional traders”. Going by the new revelations, however, Alameda may just have been the cause of the whole commotion.
Ex-Employee Blames Alameda for BTC Price Fall
Detailing what transpired, Baradwaj claims that Alameda trades were usually executed using algorithms. At least, for most of the time. However, he also claims that there were times when traders did manually send orders during times of market volatility or in their attempt to take advantage of a profit opportunity. In his tweet, the ex-employee explained that a trader was looking to ride on the wave of a news report by selling a block of BTC. Baradwaj then tweeted:
“What they missed was the decimal point was off by a few spaces. Rather than selling BTC at the current market price, they sold it for pennies on the dollar.”
Although arbitrage traders quickly helped restore Bitcoin to normal levels, the honest mistake did eventually cost Alameda some millions of dollars.
Mayowa is a crypto enthusiast/writer whose conversational character is quite evident in his style of writing. He strongly believes in the potential of digital assets and takes every opportunity to reiterate this. He's a reader, a researcher, an astute speaker, and also a budding entrepreneur. Away from crypto however, Mayowa's fancied distractions include soccer or discussing world politics.