Bitcoin flash crash on May 19, 2021 : what did really happen on Binance?

Tim Baumgartner, Andre Guettler ; editor: Halle Institute for Economic Research (IWH) - Member of the Leibniz Association

Bitcoin plunged by 30% on May 19, 2021. We examine the outage the largest crypto exchange Binance experienced during the crash, when it halted trading for retail clients and stopped providing transaction data. We find evidence that Binance back-filled these missing transactions with data that does not conform to Benford‘s Law. The Bitcoin futures price difference between Binance and other exchanges was seven times larger during the crash period compared to a prior reference period. Data manipulation is a plausible explanation for our findings. These actions are in line with Binance aiming to limit losses for its futures-related insurance fund.

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Year of publication:	[10. November 2022]
Authors:	Baumgartner, Tim ; Güttler, André
Institutions:	Leibniz-Institut für Wirtschaftsforschung Halle (issuing body)
Publisher:	Halle (Saale), Germany : Halle Institute for Economic Research (IWH) - Member of the Leibniz Association
Subject:	Benford's law \| Binance \| Bitcoin \| cryptocurrency \| crypto exchange \| derivatives \| extreme volatility \| fraud \| market crash \| trading outage \| Virtuelle Währung \| Virtual currency \| Volatilität \| Volatility \| Finanzkrise \| Financial crisis \| Betrug \| Fraud \| Derivat \| Derivative \| Börsenkurs \| Share price
Description of contents:	Description [iwh-halle.de]

Extent:	1 Online-Ressource (III, 63 Seiten, 3,49 MB) Diagramme
Series:	IWH-Diskussionspapiere. - Halle, S. : IWH, ISSN 2194-2188, ZDB-ID 2836591-4. - Vol. 2022, no. 25 (November 2022)
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Graue Literatur ; Non-commercial literature ; Arbeitspapier ; Working Paper
Language:	English
Other identifiers:	hdl:10419/266345 [Handle]
Classification:	G10 - General Financial Markets. General ; G12 - Asset Pricing ; G14 - Information and Market Efficiency; Event Studies ; K22 - Corporation and Securities Law ; Geld, Inflation, Kapitalmarkt
Source:	ECONIS - Online Catalogue of the ZBW

Persistent link: https://www.econbiz.de/10013435273