Crypto Twitter reacts to Binance suspending spot trading

The crypto-leaning corner of Twitter today went into meltdown after a bug in its order book forced Binance to suspend spot trading temporarily.

Signs of trouble first emerged when several users of the world’s largest crypto exchange by volume noticed a glitch on the platform. Many of them reported that there were no price movements on Binance’s spot trading options.

What just happened to @binance? Spot prices are NOT moving…@cz_binance #Binance

— Harris (invisible/transparent) (?,?) (?,?) (@say_hi_harris) March 24, 2023

The platform’s inability to update prices made it impossible for some users to make trades for several minutes. Some wondered loudly whether Binance was down for unscheduled maintenance, which might have explained the non-movement.

Is Binance under maintenance right now. Prices on my charts havn’t moved for ages???

— Andrew Scott (@AndrewS71340286) March 24, 2023

However, soon after customers began airing their concerns, Binance took to the same platform, informing users that it was suspending all spot trading as it figured out the problem.

After a while, Binance CEO Changpeng Zhao (CZ) announced that preliminary investigations indicated the exchange’s matching engine had been affected by a bug “on a trailing stop order.”

Trading was resumed at 6 PM Dubai time, according to CZ. However, trailing stop orders will remain halted and all existing orders will be canceled.

Trailing stops will be disabled for the time being. Existing trailing stops will be cancelled. Users with open trailing stops order will receive a push notification + email. ?

— CZ ? Binance (@cz_binance) March 24, 2023

Is Binance big enough to affect the entire crypto market?

CZ’s statement wasn’t well received in some quarters of Crypto Twitter, with one user going by the online moniker TheVultureTrade questioning the oversized effect of Binance on the broader crypto market.

According to TheVultureTrade, the slightest problem on Binance has wider systemic ramifications on crypto prices. The person suggested that Binance’s dominance of the exchange space could be detrimental to the crypto industry.

I am scared about @binance, it’s a very good exchange and all you want, but look at how systemically impacts prices at the slightest problem, without at least bipolar competition it could be detrimental, @cz_binance gotta admit that. #btc

— ?TheVultureTrade? (@TheVultureTrade) March 24, 2023

In an unrelated tweet, CZ seemed to lend credence to TheVultureTrade’s sentiment, saying that when Binance stops trading, however briefly, crypto prices won’t move that much. CZ asserted that if smaller exchanges kept trading, they stood to lose money when Binance’s “deeper order books” came back online.

When the biggest exchange halts trading, prices won’t move much. If it moves on smaller exchanges, when #Binance comes back, our deeper orderbook will bring the price back, causing those guys to lose money. Traders know this.

— CZ ? Binance (@cz_binance) March 24, 2023

Still, according to other users, CZ’s statement smelled of cartel-like behavior. Some even likened his tweet to an admission of Binance’s ability to control the market and manipulate prices, all while threatening other players in the sector.

The guy now, again, publicly admits that they manipulate the price, and, then threatens anyone that goes against his wishes. You already this story is going to end SO well… https://t.co/XVK70m7vmz

— SquirtleVision (@SquirtleVision) March 24, 2023

As per CZ, Binance’s Engine 1 is back online, but the system still requires more time “to do reconciliations” and to allow the other engines to get back up to speed.

According to him, the bug responsible for the snafu caught the engines just three minutes before they took their hourly snapshot of the system, meaning reconciliation would take slightly longer than usual.

CZ also confirmed that Binance halted trading, canceled all internal meetings, and focused its 8,000-strong workforce on resolving the bug.

Source