On November 14th, Gemini Bitcoin exchange personnel put in place a Trade Reversal on a transaction that happened few hours earlier on their systems. On November 20th, CoinTelegraph CT r: 25 received a very upset email from Mike Miescke, one of the users affected in the transaction.
Correspondent of Cointelegraph spent almost 2 weeks to investigate this story. Here is the results. The beginning
To summarize the events, on November 13th, Mike placed a large Bitcoin CT r: 8 buy market order to fill various limit prices up to $2,200 per Bitcoin. The operation was clearly atypical, as the average trading value was set around the $340 quota at that time.
With the transactions , Mike earned up to around 6 BTC for each Bitcoin sold.
Was that a typo from the buyer? Was that a slip on the mouse button? We can’t know, and it surely isn’t Mike’s business.
The transaction went through, there was no system malfunction, and everything looked fine.
To say it in other words: it was entirely the buyer’s error, as later confirmed by Gemini CT r: 68 executives.
Despite this, few hours later the trade reversal happened. Discrepancies Between Gemini’s TOL And Company Action Mike states that, according to the Gemini’s Terms Of License (TOL) document, they couldn’t do it.Indeed, the fact that the transaction was completed meant that the buyer had funds, and the (supposed) system checks for abnormal orders didn’t block it either.Mike explains that the TOL: “Makes the user think that if they submit an abnormal market order that would pass a certain boundary that is abnormal, that it is instantly flagged and held before it will be processed allowing for addition confirmation from the staff. A certain scenario where this situation should kick in might be a user wants to limit buy for $220, but […]
