Binance Exchange User Makes Grave Mistake on a Litecoin Trade by Paying $100,000 for 1 LTC
Days ago, a user reportedly lost $400,000 on Binance when pressing “Market Buy” to purchase a token. They paid over 17,000 times the market price and now there has been a second publicized transaction gone awry.
Binance is one of the largest, most popular cryptocurrency exchanges in the world, making them one of the most trusted. The first weirdly overpriced event on this platform has led to speculation bordering on conspiracy about whether the alleged losses even happened at all.
The second occurred while the public was still waiting for comment from Binance on the first. According to Binance’s trade log, the early morning hours of May 14th saw a trade involving Paxos stablecoin that caused the value of Litecoin to reach $99,997.99.
Twitter users wasted no time in making fun of the occurrence. Others, however, have been bouncing around the idea that 2 trades gone wrong within 3 days could be pointing to a data error.
Having trades go wrong twice in three days could affect their reputation but so far, the morning’s incident does not appear to have greatly affected Binance’s trading volume as of yet.
Just last week, CEO Changpeng Zha asserted there was a maximum price deviation set for the exchange at 500 percent but the incident with Litecoin saw a jump of almost 11,000 percent.
Koinex in India set limits on their own platform, preventing accepted order from not breaching more than 50% difference to prevent similar problems. For example, a cryptocurrency trading at $1 can have a range of $0.50 to $1.50. This can be helpful on a platform with mostly first time traders like with Koinex.
Still, the practice is debatable. Binance has yet to comment on either incident or the speculation of data errors.