[OFFICIAL]Bitfinex.com first Bitcoin P2P lending platform for leverage trading

[blueberry]

I propose a solution to the problem in the future:

One thing that would help would be for Bitfinex to implement a circuit breaker like they have in the stockmarkets, where where trading is automatically halted for a predetermined period of time (10 to 30 minutes) when the market moves more than say 10%. By the time trading has restarted, panic would have subsided and the market would have become normalized avoiding a flash crash.

Add this the terms and faqs so traders will be aware in advance and then cannot complain when trading halts.

This is a good idea, thank you.

I don't know what users expected, but please be aware that trading can be halted if the conditions require it.

Thanks
Raphael

Also this should give yourself some time during the frozen period to fix any issues like broken Bitstamp api, trade matching etc... Set up an alert to your mobile phone when the circuit breaker is triggered. And allow for an possible extension of the frozen period but only if absolutely necessary. Make this clear in the faqs/terms.

[Indamuck]

Also this should give yourself some time during the frozen period to fix any issues like broken Bitstamp api, trade matching etc... Set up an alert to your mobile phone when the circuit breaker is triggered. And allow for an possible extension of the frozen period but only if absolutely necessary. Make this clear in the faqs/terms.

Yes, and because the process can be determined/explained well in advance, traders can plan accordingly.

[MAbtc]

The bitfinex website is a very complex piece of art, and I just wanted to show my support for you guys running this site. Keeping everybody happy is very difficult to do, especially when there are teenagers very angry that they missed a $10 trade that should not have happened in the first place.

You guys handled this well, Thanks!

Bitfinex is not the NYSE. When it halts the market, bitcoin trading does not halt. Holding short positions open while the market rallies 25% is not a laughing matter. We are not talking about the rise from $100 - $660, but $530 - $660. Traders watched for an hour as the their shorts stood open and the market rallied 25% -- that is completely unacceptable. A "trade that should not have happened" has nothing to do with it -- we need to be able to CLOSE OUR FUCKING POSITIONS.

You obviously have little respect for traders. Please understand that your money, as a liquidity provider, is not more important than ours.

I do have respect for traders, but when the BTC funds at bitstamp ran out, we chewed through bitfinex's orderbook like butter, then all margin calls hit, and we were heading to 0. Do you think that is an acceptable risk for a lender?

The bolded is unacceptable on the part of Bitfinex. This is a recurrent problem and should not be happening.

What I took exception with is your attitude complaining of "teenagers very angry that they missed a $10 trade that should not have happened in the first place" -- that is some inconsiderate bullshit that speaks nothing to the magnitude of value on the table. It's uncalled for and, as stated, by and large irrelevant to the legitimate complaints of traders who held short positions during this fiasco and were unable to close them. We are not responsible for Bitfinex's cash flow, but we may lose tens of thousands of $ in profit and/or incur losses because of it.

[mooncake]

Everyone,

I'd just like to point out that if we did not have stopped the trading engine, the cascading effect of liquidations would have been terrible (just look at the charts already).

So we DID make the right choice in halting the trading engine to avoid this situation by letting price calm down a bit.

One day the Bitcoin market will become mature enough to support this level of volume, right now it isn't;

THanks for your comprehension
Raphael

I just like to point out that it is the responsibility of the margin traders to know and own the risks of margin trading, including the limitations of BFX trading engine. If the market crashes and their positions are liquidated, they will just need to accept it.

Regarding the BTC liquidity issue at Bitstamp, I think that it is not acceptable. Yes, it is challenging to estimate the number of BTC kept at Bitstamp. But does it mean that everytime there is a crash, BFX needs to halt trading?

What I really am interested to know is: If a crash of this scale happens again, should we expect BFX to halt trading? No doubt the answer will affect our trading strategy.

[TwinWinNerD]

The bitfinex website is a very complex piece of art, and I just wanted to show my support for you guys running this site. Keeping everybody happy is very difficult to do, especially when there are teenagers very angry that they missed a $10 trade that should not have happened in the first place.

You guys handled this well, Thanks!

Bitfinex is not the NYSE. When it halts the market, bitcoin trading does not halt. Holding short positions open while the market rallies 25% is not a laughing matter. We are not talking about the rise from $100 - $660, but $530 - $660. Traders watched for an hour as the their shorts stood open and the market rallied 25% -- that is completely unacceptable. A "trade that should not have happened" has nothing to do with it -- we need to be able to CLOSE OUR FUCKING POSITIONS.

You obviously have little respect for traders. Please understand that your money, as a liquidity provider, is not more important than ours.

I do have respect for traders, but when the BTC funds at bitstamp ran out, we chewed through bitfinex's orderbook like butter, then all margin calls hit, and we were heading to 0. Do you think that is an acceptable risk for a lender?

The bolded is unacceptable on the part of Bitfinex. This is a recurrent problem and should not be happening.

What I took exception with is your attitude complaining of "teenagers very angry that they missed a $10 trade that should not have happened in the first place" -- that is some inconsiderate bullshit that speaks nothing to the magnitude of value on the table. It's uncalled for and, as stated, by and large irrelevant to the legitimate complaints of traders who held short positions during this fiasco and were unable to close them. We are not responsible for Bitfinex's cash flow, but we may lose tens of thousands of $ in profit and/or incur losses because of it.

dude chill.

GC said already they send there multiple millions of USD to bitstamp. There is a limit how much they can risk sending. So chill out, i think they handeled this situation very good, like a stockexchange would have after a flashcrash!

[alekznder]

TO RAPHEAL OR GIANCARLO

username: alekznder

I started a short with 2BTC at 665 on margin and wanted to close at 550...

I closed it once trading began again but I hate to say I lost about 10% profit on it.. any chance I can get like 75$ accredited to my account?

Cheers, Al

[blueberry]

The bitfinex website is a very complex piece of art, and I just wanted to show my support for you guys running this site. Keeping everybody happy is very difficult to do, especially when there are teenagers very angry that they missed a $10 trade that should not have happened in the first place.

You guys handled this well, Thanks!

Bitfinex is not the NYSE. When it halts the market, bitcoin trading does not halt. Holding short positions open while the market rallies 25% is not a laughing matter. We are not talking about the rise from $100 - $660, but $530 - $660. Traders watched for an hour as the their shorts stood open and the market rallied 25% -- that is completely unacceptable. A "trade that should not have happened" has nothing to do with it -- we need to be able to CLOSE OUR FUCKING POSITIONS.

You obviously have little respect for traders. Please understand that your money, as a liquidity provider, is not more important than ours.

I guess ultimately there will have to be increased regulations for Bitcoin exchanges in the future that all regulated exchanges must implement a concerted circuit breaker of some sort or even route their trades through an ECN where the common circuit breaker will be implemented. Right now it is still the unregulated Wild West and problems and compromises will still happen.

[F-bernanke]

The bolded is unacceptable on the part of Bitfinex. This is a recurrent problem and should not be happening.

What I took exception with is your attitude complaining of "teenagers very angry that they missed a $10 trade that should not have happened in the first place" -- that is some inconsiderate bullshit that speaks nothing to the magnitude of value on the table. It's uncalled for and, as stated, by and large irrelevant to the legitimate complaints of traders who held short positions during this fiasco and were unable to close them. We are not responsible for Bitfinex's cash flow, but we may lose tens of thousands of $ in profit and/or incur losses because of it.

That's not what i meant, I mean people expecting (for example in this case) that the coins they got for 100$ was rightfull. Of course I understand your problems when the market halts when your shorting and rallys at that time, that sucks and i'm truly sorry for you.

[fonzie]

I had an open short for 50BTC opened at around 718. It´s gone now? WTF Bitfinex team could you please help me, my username is Tetsuo.
Thanks.

[alpha492]

Dear users,

The trading engine is currently stopped due to the recent volatility and the fact that we exhausted our funds on Bitstamp in this critical moment.

We are waiting for new deposit to hit our Bitstamp account, after which we will resume the trades.

have a good day
Raphael

You do know that this is going to happen over and over and over again when the market has some volatility?   That outtage just cost me $8000 in profits and I'm sure many lost even more...just not acceptable.  You guys need a better system with your site.

Feel free to post any suggestion.
We will pay you if they make sense.
Otherwise just stop talking nonsense.

Giancarlo
Bitfinex Team

What is nonsense is that you keep offering leverage even though you clearly have no business doing it.

Apparently the stance of you organization is 'you should have seen this coming'.

Am I the only one that didn't receive the memo?  No email, no tweet, no post on your website, how on earth were your customers supposed to know this was the protocol?  Why wouldn't you post on the site the price at which shorts were going to be executed after the halt?  Why wouldn't you send out an email about the emergency halting?

You post on this forum after the fact treating your costumers like they're stupid for your staff failing to inform them about policy.

System aside there were a million things you could do starting with informing your customers, and as one trader said earlier the WORLD FIRST BITCOIN EXCHANGE JUST HALTED WITHDRAWALS it has been on coindesk for weeks, and you don't have to be a genius to figure out that the markets are going to respond, in fact that's why many of us chose to short.



I think many of us have tried to be pretty patient, but seeing you insult customers like this is sickening.  Your treating costumers who lost money due to your failure like 'idiots' (quoting you) for not expecting you to uphold your end of the bargain.

And maybe we are I guess, seeing as Bitfinex has become the legendary seller of the worlds only .0001$ LTC and we still continued to trust your staff.

[obitoo]

I just like to point out that it is the responsibility of the margin traders to know and own the risks of margin trading, including the limitations of BFX trading engine. If the market crashes and their positions are liquidated, they will just need to accept it.

Regarding the BTC liquidity issue at Bitstamp, I think that it is not acceptable. Yes, it is challenging to estimate the number of BTC kept at Bitstamp. But does it mean that everytime there is a crash, BFX needs to halt trading?

What I really am interested to know is: If a crash of this scale happens again, should we expect BFX to halt trading? No doubt the answer will affect our trading strategy.

Could someone explain to me - as if to a child please - In which situation Bfx require to be pulling btc back off of bitstamp?  Thats the bit i'm not understanding yet, sorry.  What was happening here, which specific scenario?  Is it as simple as sells executed on stamp? Anything else? Why do we care about btc moving back, doesnt it all get accounted for eventually?

As if to a (not too young) child. Ok, young adult maybe   

[unclescrooge]

Everyone,

I'd just like to point out that if we did not have stopped the trading engine, the cascading effect of liquidations would have been terrible (just look at the charts already).

So we DID make the right choice in halting the trading engine to avoid this situation by letting price calm down a bit.

One day the Bitcoin market will become mature enough to support this level of volume, right now it isn't;

THanks for your comprehension
Raphael

I just like to point out that it is the responsibility of the margin traders to know and own the risks of margin trading, including the limitations of BFX trading engine. If the market crashes and their positions are liquidated, they will just need to accept it.

Regarding the BTC liquidity issue at Bitstamp, I think that it is not acceptable. Yes, it is challenging to estimate the number of BTC kept at Bitstamp. But does it mean that everytime there is a crash, BFX needs to halt trading?

What I really am interested to know is: If a crash of this scale happens again, should we expect BFX to halt trading? No doubt the answer will affect our trading strategy.

Guys,

Even if there was enough BTC on our Bitstamp account, trading would have been halted. Why? Because we would also have "wiped out" Bitstamp orderbook with the cascade of liquidations that were just about to happened. So it's not a matter of having enough funds where or whatever, it's a matter of an illiquid market that became very volatile, and millions of dollars of leveraged positions that would either evaporate or be preserved by calming things down.

If you think you have undue losses because of the halting of trading, please write to support@bitfinex.com and your case will be examined within a few DAYS.

Thank you for your comprehension,
Raphael
Bitfinex team

[alpha492]

Everyone,

I'd just like to point out that if we did not have stopped the trading engine, the cascading effect of liquidations would have been terrible (just look at the charts already).

So we DID make the right choice in halting the trading engine to avoid this situation by letting price calm down a bit.

One day the Bitcoin market will become mature enough to support this level of volume, right now it isn't;

THanks for your comprehension
Raphael

I just like to point out that it is the responsibility of the margin traders to know and own the risks of margin trading, including the limitations of BFX trading engine. If the market crashes and their positions are liquidated, they will just need to accept it.

Regarding the BTC liquidity issue at Bitstamp, I think that it is not acceptable. Yes, it is challenging to estimate the number of BTC kept at Bitstamp. But does it mean that everytime there is a crash, BFX needs to halt trading?

What I really am interested to know is: If a crash of this scale happens again, should we expect BFX to halt trading? No doubt the answer will affect our trading strategy.

This is a fantastic point, and I think the one everyone here not just 'flaming' is trying to get to.  Is the random unannounced failure of the BFX system something we are supposed to account for when using your system?

As I posted earlier, I saw nothing on your site, and didn't receive any emails.  How should we expect to be informed that you are halting the system, or the system has glitched?  Is this thread supposed to be our primary source of information?

Furthermore, for those of us who were trying to close shorts with buy orders, doesn't that actually help stabilize the price?  Many of us aren't pissed that we couldn't buy 25 dollars bitcoin, I was trying to close a short at 578 which hardly seems unreasonable to me.

[MAbtc]

Guys,

Even if there was enough BTC on our Bitstamp account, trading would have been halted. Why? Because we would also have "wiped out" Bitstamp orderbook with the cascade of liquidations that were just about to happened. So it's not a matter of having enough funds where or whatever, it's a matter of an illiquid market that became very volatile, and millions of dollars of leveraged positions that would either evaporate or be preserved by calming things down.

If you think you have undue losses because of the halting of trading, please write to support@bitfinex.com and your case will be examined within a few DAYS.

Thank you for your comprehension,
Raphael
Bitfinex team

So, without any stated policy, you simply halt trading and/or refuse to execute trades that will cause a string of forced liquidations? You guys need to state a policy and stick to it. You can't just play God.

[btcdrak]

Guys,

Even if there was enough BTC on our Bitstamp account, trading would have been halted. Why? Because we would also have "wiped out" Bitstamp orderbook with the cascade of liquidations that were just about to happened. So it's not a matter of having enough funds where or whatever, it's a matter of an illiquid market that became very volatile, and millions of dollars of leveraged positions that would either evaporate or be preserved by calming things down.

If you think you have undue losses because of the halting of trading, please write to support@bitfinex.com and your case will be examined within a few DAYS.

Thank you for your comprehension,
Raphael
Bitfinex team

So, without any stated policy, you simply halt trading and/or refuse to execute trades that will cause a string of forced liquidations? You guys need to state a policy and stick to it. You can't just play God.

And leave everyone in the dark. They should have put a banner on the site stating trading was halted...

[MelMan2002]

So...I have a suggestion for the site completely unrelated to recent happenings:

Please make an option to execute exchange orders in the trading wallet such that

• If I currently have 1 btc in my trading wallet
• And I'm in a long position for 1 btc
• And I sell 2 btc in a market order

I will close my position and then exchange my 1 btc for usd (assuming I didn't close my position at a loss).

Currently what would happen is I would be shorting 1 btc while still holding 1 btc.  The only way to close my position and then exchange my 1 btc would be to close my position, move my 1 btc to the exchange wallet, exchange for usd, then move those usd back to the trading wallet.  Which is all very tedious, takes time, and you have to be sitting at the computer to make it all happen.

So I'm just asking for an option in the settings to enable this and you can keep it how it currently is by default.

[ledmaniak]

Furthermore, for those of us who were trying to close shorts with buy orders, doesn't that actually help stabilize the price?  Many of us aren't pissed that we couldn't buy 25 dollars bitcoin, I was trying to close a short at 578 which hardly seems unreasonable to me.

Yes, if most of them were market orders then it should quickly bring up the price again.

@bfx:
Because you calling some complainers here "idiots" because they lost a few to a few hundred dollars, I guess it won't make sense to even try and send you an email about the loss made. The amount of money should not matter, it's the percentage that matters and every customer should be treated equally.


And yes, I'm trying to be constructive and understand the situation fully..

[Sukrim]

TO RAPHEAL OR GIANCARLO

username: alekznder

I started a short with 2BTC at 665 on margin and wanted to close at 550...

I closed it once trading began again but I hate to say I lost about 10% profit on it.. any chance I can get like 75$ accredited to my account?

Cheers, Al

Did you have an actual buy order at 550? Or did you just want to close out of a hunch?

[mooncake]

Guys,

Even if there was enough BTC on our Bitstamp account, trading would have been halted. Why? Because we would also have "wiped out" Bitstamp orderbook with the cascade of liquidations that were just about to happened. So it's not a matter of having enough funds where or whatever, it's a matter of an illiquid market that became very volatile, and millions of dollars of leveraged positions that would either evaporate or be preserved by calming things down.

If you think you have undue losses because of the halting of trading, please write to support@bitfinex.com and your case will be examined within a few DAYS.

Thank you for your comprehension,
Raphael
Bitfinex team

BTC-e went down to 102, Bitstamp to 530. No doubt with the selling from BFX, price at Bitstamp would have been lower. Look at the price at BTC-e now: 600 - 650. So, does it really matter? In any case, it is not the exchange owner's responsibility to affect price. The responsibility is to ensure the exchange works at all times.

And for the "millions of dollars of leveraged positions that would either evaporate", this is not a risk the exchange owner should manage for the margin traders. This is a risk the margin trader themselves should know and own.

It is not about profit and loss. It is about the philosophy and the principles of running exchanges.

[unclescrooge]

Guys,

Even if there was enough BTC on our Bitstamp account, trading would have been halted. Why? Because we would also have "wiped out" Bitstamp orderbook with the cascade of liquidations that were just about to happened. So it's not a matter of having enough funds where or whatever, it's a matter of an illiquid market that became very volatile, and millions of dollars of leveraged positions that would either evaporate or be preserved by calming things down.

If you think you have undue losses because of the halting of trading, please write to support@bitfinex.com and your case will be examined within a few DAYS.

Thank you for your comprehension,
Raphael
Bitfinex team

BTC-e went down to 102, Bitstamp to 530. No doubt with the selling from BFX, price at Bitstamp would have been lower. Look at the price at BTC-e now: 600 - 650. So, does it really matter? In any case, it is not the exchange owner's responsibility to affect price. The responsibility is to ensure the exchange works at all times.

And for the "millions of dollars of leveraged positions that would either evaporate", this is not a risk the exchange owner should manage for the margin traders. This is a risk the margin trader themselves should know and own.

It is not about profit and loss. It is about the philosophy and the principles of running exchanges.

I understand what you're saying, and if it was only the money of traders at risks, we would have no issues. But we are also talking about the money of all the liquidity providers that would have disappeared in a blink of an eye (because the drop to 100 USD was only the beginning).

I know that liquidity swaps are not insured and CAN be lost, this is very clear in our TOS. However I do think that avoiding millions of dollars of losses for a few seconds of panic can be a good choice. We're not trying to play God, we're just trying to act in the best interest of all of our users, which is why, I repeat, if you think you had undue loss on shorts because of our halting, please write to us on support@bitfinex.com (and be a bit patient).

We are not taking side for lenders, or for long traders, or anyone, we really try to act in the best interest of everyone.

Raphael
Bitfinex team