Deribit to Pay Users $1.3M After Bitcoin Price ‘Flash Crash’ to $7.7K

Cryptocurrency futures and options exchange Deribit says it will use its own money to refund users affected by an exchange rate miscalculation.

In a tweet on Nov. 1, Deribit recognized its role in the error, which occurred on Thursday and resulted in Bitcoin (BTC) trading at around $7,700.

Deribit: crash caused by “outlier” value

This, in turn, caused traders to be paid a lower price for BTC/USD sells, with Deribit calculating the losses at $1.3 million. 

Deribit Bitcoin futures chart. Source: TradingView, Twitter

“Deribit will reimburse over $1.3 million in losses from the BTC index calculation data issue around 21:00:00 UTC on October 31, 2019,” it confirmed.

The exchange added: 

“The Deribit Insurance fund will not be used to cover these losses, but compensation will be covered by Deribit.”

In a further message, staff explained that issue came from an erroneous value which should not have been used in calculating the BTC/USD rate.

“An outlier should have been excluded from the index, therefore it's refunded by the firm,” it reads.

Coinbase Pro quiet on order cancellations

At the same time as Deribit, Coinbase Pro, the high-volume trading arm of United States exchange Coinbase, also appeared to encounter problems. 

According to various accounts including by well-known trader Jacob Canfield, the exchange began automatically cancelling swathes of orders on Thursday. 

Canfield described Coinbase Pro’s order book as having “glitched out,” with an official response still to surface. 

Bitcoin saw periods of volatility on Thursday, reaching a high of $9,365 before reversing and abruptly dropping by around 2.5% as the exchange issues hit markets.