Bitfinex investigator @bitfinexed is at it again. This time he believes that the flash crash in Bitcoin and rapid recovery were caused by Bitfinex to steal away people’s portfolios on margin calls that went bad as well as turn some of their profits into cash since using fake Tethers to pump up the Bitcoin price.
There does seem to be some issues with Bitfinex not handling margin calls properly, as many users are complaining they were liquidated when there orders where not executed properly due to stop loss orders being executed way lower than the customer had set. Also, after the initial crash in price, the price rebounded so fast that on a 1 minute candle chart you see very unusual movement.
If you remember, this summer GDAX had a similar flash crash incident that happened and many were calling foul play. Lawyers began reaching out to people who lost money on these suspicious margin calls. Eventually GDAX agreed to pay everyone back, possibly to avoid an investigation by lawyers and what it may uncover since they do a lot of business in the U.S via Coinbase. However, Bitfinex kicked out all U.S. customers not long ago. They said the reason was because U.S laws were not worth dealing with. Perhaps we are seeing why.
You can follow the whole timeline of events from today @bitfinexed Twitter feed below.