BitFinex Bitcoin Exchange Experiences Major Margin Limit Accounting Glitch
Starting the evening of Tuesday Feb 5, 2014, the Hong Kong based bitcoin exchange BitFinex experienced a MAJOR Margin Limit Accounting Glitch.
I had about BTC 0.38 in my account (approx $300 USD), and suddenly could trade with a margin of over $130,000!
I was able to make a few small trades before the error was notices, the exchange locked up, and the error was fixed. My outstanding position with over $4000 in ‘overdrawn’ margin was promptly cancelled by morning.
If I ever see this glitch again I will not hesitate to take out a $130,000 position and trade with it.
Starting the evening of Tuesday Feb 5, 2014, the Hong Kong based bitcoin exchange BitFinex experienced a MAJOR Margin Limit Accounting Glitch. Open account positions were being given 10,000 time thier value in margin trading power. The glitch was first manifested when someone or something managed to get a buy order posted for 0.0 bitcoin at a price of $10,000/btc. This created an accounting condition where all account value and leverage was based off of the extraordinarily high price of the ‘fake’ order. Several traders including myself were able to profit by trading with margins far in excess of our account holding limits. The problem was resolved within hours and any open positions using ‘grossly borrowed funds’ were removed from the books.