- Bitcoin prices dropped almost 90% in a flash crash due to Binance tech problem.
- Binance’s recent trouble was a bug in their trading algorithm.
- Binance has always been under the regulatory scanner in many countries.
World’s largest cryptocurrency exchange Binance has been in hot waters for quite some time now. After UK’s Financial Conduct Authority banned the exchange from operating in the country in June this year, it has faced many hurdles in the past few months. Its latest trouble is in the US where a bug in its trading algorithm led to a flash crash to US $8,200.
Binance’s free fall started from 2020 itself. Binance’s alliance with Japanese crypto platform TaoTao was abandoned midway. In 2021, its US CEO Brian Brooks resigned just three months into job in August, regulatory woes, and the shutting of operations in various countries have created headaches for the world’s leading exchange.
Let’s look at 3 of the biggest troubles that Binance faced in 2021.
- Bug attack on client's trading algorithm
After breaking the all-time high record, Bitcoin was halted by the bug attack on Binance, which made the prices dropped to US $8,200 from around $65,000. The recent and most disheartening one, especially when the Bitcoin was on a rampage. Binance officials stated that the flash crash was due to a bug in the trading algorithm of one of its clients. The institutional traders had hinted that the bug was there in the trading algorithm, and they had to work on it to resolve the issue.
The market on Friday was on a somber mood and hasn’t yet come back anywhere near to its recent performance. It was trading at $63,355.54 with a 24-hour trading volume of US $42,189,652,011. It was still down by 3.47% from the 24-hour period.
The flash crash was the least thing that the market would have wanted at the moment as a few market participants were hoping that BTC could well break the US $100,000 by the end of this year. But now that looks like a distant dream, with the bears too trying to get their foot in the door.
- Ban by the Japan, UK, Canada regulators
Another big moment when Binance was banned by different countries like UK and Canada. Binance’s travails volumes were hit badly after it ran into trouble in Japan, the UK, and the Canadian province of Ontario.
The Japanese Financial Services Agency had issued a second warning in three years to leading cryptocurrency exchange, stating that it is not registered to operate in Japan. Couple of days later, the UK’s FCA banned Binance Markets Limited, a British entity owned by the Cayman Islands-based Binance, from carrying out any regulated activities in the country.
Coincidentally, Binance decided to stop its operations in Canada’s Ontario, where authorities accused them of failing to comply with regulations.
- China’s ban on cryptos
China’s ban on cryptocurrencies also had a severe impact on Binance’s operations in the country. It had to pull out of its operations in the country. Not just China, it must pull out of its operations from operations in Hong Kong too, which is affected its volumes and business in the long run.