On April 14, someone set a sales order to 2,500 Bitcoin, worth approx. 212 million dollars, on the Binance Order book to $ 85,600, about 2-3% over The spot prices that are traded at that time.
As the Bitcoin price looks at such a large order, forcing to this level around 17:00 UTC.
Suddenly, the order was gone, as was seen using coin glass data, which caused a brief moment of the market’s apathy as bulls and carries threw themselves to fill a void in liquidity.
However, the Bitcoin prize at that time was already on shaking grounds due to geopolitical concerns. Then it went lower after the disappearance order caused chaos for the traders.
So what happened?
An answer can be an illegal technique that involves placing a large border order to Rile trading activity and then removing the order when the price comes close to filling it. This is called “Order Spoofing”, defined by 2010 US DODD-FRANK ACT as “the illegal practice of biding or offering for the purpose of canceling before execution.”
As seen in the liquidity heating card in the picture above, on the surface, the order seemed at a price of $ 85,600 as an important resistance area, which is why market prices began to gain weight. In reality, however, this order and liquidity were probably counterfeit, giving dealers the illusion of a stronger market.
Liquidity heating visualizes an order book on an exchange and shows how much of an asset rests on the book at each price point. Dealers will use a heating card to identify areas with support and resistance or even to target and squeeze the oppression positions.
In this particular case, the trader seemed to have placed a possible counterfeit order when the US stock market was closed, usually a low -liquidity period for the 24/7 Bitcoin market. The order was then removed when the US market opened when the price moved towards filling it. This could still have had the desired effect, as, for example, a large order for an exchange can spur dealers or algorithms on another exchange to remove their order, creating a void in liquidity and subsequent volatility.
Another reason could be that the trader who placed a $ 212 million sales order on Binance wanted to create short -term sales pressure to be filled on border purchases, and then removed that order when these purchases were filled.
Both options are plausible, albeit still illegal.
‘Systemic vulnerability’
Former ECB analyst and current CEO of Oak Security, Dr. Jan Philipp, Coindesk told that manipulative trading behavior is a “systemic vulnerability, especially in thin, unregulated markets.”
“These tactics give sophisticated actors a consistent edge compared to retailers. And as opposed to tradfi, where forgery is explicitly illegal and monitored, crypto exists in a gray zone.”
He added that “forgery must be taken seriously as a threat as it helped to trigger the flash crash in 2010 in traditional markets that deleted nearly $ 1 trillion trillion in the market value.”
Binance, meanwhile, insists on playing its role in preventing market manipulation.
“Maintaining a fair and orderly trading environment is our highest priority, and we invest in internal and external surveillance tools that continuously monitor trade in real time marks discrepancies or patterns that differ from normal market behavior,” Binance spokesman told Coindesk without directly tackling the vanishing $ 212 million.
The spokesman added that if anyone is found manipulating markets, it will freeze accounts, report suspicious activity to regulators or remove bad actors from his platform.
Crypto and forgery
Spoofing or a strategy that mimics a false order is illegal, but for a young industry like crypto, the story is filled with such examples.
During 2014, when there was little or no regulatory supervision, most of the trading volume took place on only bitcoin exchanges from retailers and cypherpunks that opened the industry for such practice.
During the 2017 ICO phase, as trading volume Skyrocket, tactics as spoofing were also expected as institutions were still skeptical of the asset class. In 2017 and 2018, dealers regularly placed nine figures that they did not intend to fill, only to withdraw the order shortly after.
Bitmex founder Arthur Hayes said in a blog post in 2017 that he “found it incredible” that forgery was illegal. He argued that if a smart trader would buy $ 1 billion BTC, they would be blasting a $ 1 billion sales order to get it filled.
However, since the 2021 pure market, the crypto market has experienced waves of institutional adoption, such as Coinbase (COIN) that goes public, strategy (former microstratey), which all goes on Bitcoin, and Blackrock launches exchange-traded funds (ETFs).
At the time of writing, no such large orders indicate further counterfeit attempts, and forgery attempts seemed to have become less obvious. Even with billions traded by tradfi companies, examples of such a strategy still exist across many crypto exchanges, especially on all-liquid altcoins.
For example, last month, Cryptocurrency Exchange Mexc announced that it was on an increase in market manipulation. An internal study found an increase of 60% in market manipulation trials from the 4th quarter of 2024 to this first quarter of this year.
In February, a trader hyperliquid jelly market manipulated a pricing of Oracle, and Hyperliquid’s response to the activity was met with skepticism and a subsequent capital outflow.
How is the cry of the crypto market fighting?
The burden is ultimately with the exchanges and regulators.
“Supervisory Authorities must set Baseline,” Dr. Jan Philipp to Coindesk. ” [Regulators] Must define what counts as manipulation, specify sanctions and outline how platforms should react. “
The supervisory authorities have decided to strike down on such schemes. By 2020, Rogue Trader Avi Eisenberg was found guilty of manipulating decentralized exchange of exchange markets in 2022, but the cases have been few and far in between.
However, crypto exchanges must also “intensify their surveillance systems” and use switches while applying stricter listing requirements to crack down on market manipulation, Philipp said.
“Retail users won’t stay around if they keep getting front-run, falsified and dumped on. If Crypto wants to grow out of its casino case, we need infrastructure that rewards fair participation, not insider games,” concluded Philipp.
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