Bitcoin’s Price 99% Flash Crash May Have Been Work of Clever Crypto Hacker
Bitcoin’s Price Last week, while most crypto traders witnessed a sideways market with Bitcoin priceconsolidating in the mid-$8,000s, on the CAD/BTC pair on the cryptocurrency exchange Kraken, there was a flash crash, wiping out 99% of its value in seconds before rocketing back into its trading range.
While a combination of low liquidity, thin order books, and large “fat-finger” market orders are often the cause of these flash crashes, according to the crypto community there is more at play in this particular instance. Some speculate that it was a clever hacker that was using a separate account to place low bids that were market sold into, allowing the hacker to withdraw “clean” Bitcoin that isn’t tied to any hack from the exchange.
Was a Brilliant Crypto Hacker Behind Bitcoin’s Price Flash Crash on Kraken?
Part of what makes Bitcoin and other cryptocurrencies so groundbreaking is due to the blockchain technology underpinning them. The immutable ledger technology keeps a record of every transaction ever made on the blockchain, providing unrivaled transparency and traceability.
Unfortunately for hackers, this means that all stolen cryptocurrencies create a blockchain transaction trail that makes “washing” cryptocurrencies increasingly difficult. Illegally obtained Bitcoin, can cause crypto investors accounts to be frozen regardless if the individual themselves had any involvement with any crime involving the crypto.
Chart courtesy of TradingView
Because hackers too are at risk of having the funds they’ve stolen flagged or frozen, they often jump through extensive hoops to “clean” the stolen crypto before attempting to cash it out.
That’s what the crypto community believes caused the flash crash on the CAD/BTC trading pair on Kraken late last week, that took the price of Bitcoin down 99% to just over $100 where the hacker’s bids had been patiently waiting.
This Kraken hacker is a genius:
1. Gets access to account with wallet containing 1200 BTC
2. Can’t withdraw so he dumps price to $100 on BTC/CAD pair
3. Gets filled for 1155 BTC at $1009067:32 PM – Jun 2, 2019Twitter Ads info and privacy254 people are talking about this
According to speculation, the clever Kraken cyber criminal hacked into an individual’s account with 1200 BTC, that the hacker couldn’t just withdraw without risking having the assets frozen at some eventual destination. So instead, the hacker, using a separate account they owned, placed extremely low bids for Bitcoin at around $100.
The hacker then used the original individual account loaded with 1200 BTC to market sell the price of Bitcoin down to the targeted bids at $100, resulting in a flash crash. The hacker gets filled for 1155 BTC at $100 each – a 99% discount – but loses 45 BTC in the process. The 45 BTC loss is a small price to pay to have access to 1155 BTC at $100 each.
The price of Bitcoin is currently trading at around $8,500, bringing the profit of each BTC to $8,400 each, or a grand total of $9.7 million in a single trade.
Related Reading | Why All Bitcoin and Crypto Investors Should Consider U2F Security Keys
It’s worth noting, that Kraken doesn’t appear to have been hacked, but this single account with 1200 BTC appears to have been affected, according to crypto speculators.
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