Blockchain Analytics Firm Arkham Intelligence Denies Involvement in Bitcoin Flash Crash
On April 26, the price of Bitcoin (BTC) nosedived roughly 7% in just one hour, falling from $29,850 to $27,789. Media outlets reported that the reason behind the flash crash was due to blockchain analytics firm Arkham Intelligence incorrectly sending out an alert that wallets linked to Mt. Gox and the U.S. government had begun shifting large sums of Bitcoin. However, Arkham Intelligence denied any involvement in the incident.
Arkham Intelligence initially confirmed the mistake was due to a “bug fix” that sent out a false alert on their analytics platform to a “small subset of users.” The alert was subsequently tweeted by the popular crypto news alert account DB or Tier10k.
However, an hour later, Arkham Intelligence published a follow-up tweet claiming that it had “conducted an investigation of the DB Alert situation, and determined that the Arkham alerts were sent accurately in this case.”
According to Arkham Intelligence, “Neither the alert nor the tweet could have caused the sharp BTC price drop today.” The drop occurred between 19:17 and 20:01 UTC, and the alerts and subsequent tweet were sent afterward, at 20:07 UTC and 20:08 UTC.
Twitter user IT Tech published data indicating that there have been no transfers from the wallets associated with Mt. Gox. This suggests that Bitcoin’s flash crash could have occurred for reasons unknown to market participants at the time of writing.
Blockchain explorer Blockchain.com published data showing that a Bitcoin address believed to be the U.S. government’s wallet for Silk Road hack funds did witness an inbound transaction worth only $0.19 on April 26, which was still processing at the time of writing.
The sudden and steep decline in prices wreaked havoc on the derivatives market, with the total sum of liquidations for crypto market participants topping $211 million at present. Bitcoin traders accounted for nearly $97 million worth of these liquidations.
At the time of writing, Bitcoin was trading for $28,378, up 0.25% in the last 24 hours, according to data from the Cointelegraph Price Index.
Cointelegraph reached out to Arkham CEO Miguel Morel for clarification on the matter but has yet to receive a response.
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