Review of the 5/19 Incident: Exchanges faced technical issues one after another, FTX remains secure, founder shares image: Liquidation rate only 2%

During the cryptocurrency market crash on 5/19, major exchanges such as Binance, Coinbase, Gemini, KuCoin, and even the crypto bank Revolut experienced outages, while FTX seemed to have safely managed the situation again, with significantly low overall liquidation volume.

Mainstream Exchanges Reportedly Experiencing Outages

Binance

Reports of outages surged for Binance and Coinbase on the evening of 5/19. Data from DownDetector showed that hundreds of issues were reported by users that night.

Reports spiked significantly after 9 p.m., with problems including login issues, website functionality, and deposit problems. Binance only announced the suspension of Ether and ERC20 withdrawals.

Additionally, CoinMarketCap, a crypto data platform under Binance, also displayed gateway errors and was inaccessible.

Coinbase

Coinbase, in a Twitter announcement, acknowledged that users were experiencing difficulties with logging in, viewing asset balances, and conducting transactions, and they are actively working to resolve the issues.

Despite briefly topping the U.S. App Store rankings and surpassing TikTok to reach the number one spot, Coinbase faced consecutive market declines and exchange outages. Its stock price dropped below $200 to $208.44 on 5/19.

Gemini, KuCoin, Revolut Also Experience Issues

Following user claims of being unable to purchase cryptocurrencies, Revolut, a crypto asset bank, responded that related functions were experiencing problems and are actively being fixed.

KuCoin similarly suspended ERC20 withdrawals, and their app also faced interruptions in access. Although there were no official announcements, The Independent, a UK newspaper, tracked issues with Gemini, with many users voicing complaints under the company's official tweets.

SBF Flaunts Data? Liquidation Rate Only 2%

FTX founder SBF released data on widespread liquidations on 5/19 evening, with the market liquidating $8 billion in just one hour. However, perhaps the highlight he wanted to showcase was FTX's remarkably low liquidation rate.

According to contract data from crypto data platform Skew, the total network contract trading volume that day was $241 billion, with FTX accounting for $14 billion, representing 5.8%, and a liquidation rate of 2%.

Leading exchange Huobi held a 17.01% trading volume share but had a significantly higher liquidation rate of 37.52%.

Its primary competitor, Binance, had a 33.6% trading volume share with a liquidation rate of 37.52%.

Furthermore, FTX did not experience any outages this time. SBF, in high spirits, retweeted many user tweets. Users claimed that the same token, traded on both FTX and Binance, was liquidated on Binance but not on FTX.

Alameda researcher Sam Trabucco briefly analyzed the market crash, suggesting that aside from vague regulatory rumors from China and elsewhere, a more likely cause was a natural correction due to excessive leverage leading to mass liquidations.

During the previous crash on 4/18, Sam also emphasized the phenomenon of excessive leverage causing mass liquidations, stating:

One thing I can never understand is why everyone is so convinced that Bitcoin rising to $60,000 is being driven by the spot market?