On February 13, 2020, the cryptocurrency market witnessed a breathtaking flash crash: XRP perpetual contracts on Bitmex dropped 56% in a single candlestick, from a high of $0.32 to a low of $0.14, triggering massive liquidations of long positions with high leverage. The incident ignited a storm of complaints on social media, with prominent traders and analysts publicly denouncing the exchange’s role in the event.
Traders Lose Entire Accounts as Stops Fail
One trader, Marc de Koning, tweeted in despair: “WTF — This is really not okay — My stop didn’t trigger and my entire Bitmex account is […] gone.” His story was echoed by many others whose stop-loss orders were completely ignored during the rapid selloff. The blockchain analytics platform Fiatleak even reported server instability as thousands of XRP enthusiasts rushed to monitor the market. “The site is wobbling and staggering under the combined weight of many, many thousands of XRP fanatics watching a technical breakout,” Fiatleak’s official account said.
Analysts Slam Exchange, Question Arthur Hayes’ Intent
Popular analyst Jacob Canfield commented to his 48,000 followers: “XRP traded from $.34 to $.14 in one candle on Bitmex. My mama told me that’s the devils coin and I’m starting to believe her.” Another trader, Cryptogainz, blamed the longs directly: “If you longed XRP/USD on Bitmex, you’re an idiot. You paid exorbitant funding and got hit with a wick that either stopped you out or liquidated you.” Benjamin Blunts called the candle “disgraceful” and demanded that Bitmex CEO Arthur Hayes use the insurance fund to compensate victims whose stops failed to execute.
Notably, just one day before the crash, Hayes had posted an image of the XRP price chart with the caption “CRipple the shorts” and commented: “Pro Tip: the Buy and Sell buttons are both equally profitable regardless of whether or not you are trading a turd.” Many traders interpreted this as a taunt or even an admission of intent, leading to even greater outrage. One user replied: “The statements you make reflect negatively on Bitmex. Very unprofessional/childlike.”
Liquidity Issues and Perpetual Contract Risks
This is not the first time XRP has experienced such a flash crash. Similar events occurred on Bitfinex two years earlier and on Bitstamp one year prior. The root cause is widely believed to be XRP’s lack of genuine liquidity, combined with Bitmex’s aggressive perpetual contract design (high leverage, funding rates, forced liquidations) that amplifies volatility. As of press time, Bitmex has not issued an official statement regarding the incident. The episode serves as a stark reminder of the dangers of trading illiquid assets with leverage, where a single candle can destroy an entire account in seconds.