‘Silly Mistake’ Costs Inexperienced Trader a Whopping $400,000 Loss on Binance
As per an all-new story circulating on Redditt over the past 48 hours or so, an anonymous Binance user recently incurred a loss of over $400,000 by accidentally clicking on the “Market Buy” button — that caused him to pay more than 17k times the market price of a token that he wished to purchase.
This unusual episode has raised a lot of questions amongst the global crypto community, with many people speculating as to how Binance could even allow for such a trade to take place to begin with.
The Specifics of the Matter
In relation to the above stated issue, a Redditor by the name of Diethxbye pointed out that his friend “allegedly” lost around $400k due to a trade that went wrong on Binance — one of the world’s premier crypto trading platforms.
As per the post, an unnamed user procured PAXOS stablecoins worth $500,000 recently, following which he moved all of his freshly purchased tokens to Binance. To elaborate further on the matter, the tokens were sent to the premier exchange’s native wallet offering on the 6th of this month — primarily because the owner of the funds was looking to buy an equal number of Chainlink tokens (LINK) in place of his PAXOS holdings.
However, things quickly went downhill from there because soon after the inexperienced trader — who apparently was not well versed as to how to use live order books — accidentally pushed the ‘market buy’ button with “$500,000 worth of paxos stablecoins on the Paxos/Chainlink order book” — a ledger that usually witnesses around $10k worth of transactions every day.
Diethxbye claims that the tx was essentially caused due to a lack of basic understanding of how crypto trading platforms worked. Not only that, he then went on to add:
“Needless to say, this was a very poor decision, and he cleaned out the entire order book and spiked the price of Chainlink, which has a market price of about $0.58 all the way to $9,999.”
So Whose Fault is it Really?
From the outside looking in, it appears as though Binance only acted as a financial intermediary in the matter and thus considering the circumstances, the transaction cannot be reversed.
However, some crypto experts have been quick to note that Binance is yet to “retroactively remove sell orders at inflated prices” — so there might still be some room for remedial measures to be implemented.
Lastly, from a purely financial standpoint, we can see that because of the aforementioned tx taking place, Chainlink’s price has appreciated by a whopping 7,000 times within last few days.
In closing out this piece, it should be noted that the user who lost all of his funds reportedly has an open ticket with Binance. However, at press time, a representative for the exchange is yet to address the issue.
It now remains to be seen how this murky situation plays out from here on end.