Popular crypto-derivatives exchange FTX was in the crosshairs earlier today after UI outages contributed to severe consequences for a few traders in the market.
According to a series of tweets, FTX was delayed in sending fill reports to users. This meant that most traders operated under the assumption that their orders didn’t go through when in actuality these orders had been filled already. This fill report lag resulted in many traders being over-leveraged in their positions, before being completely liquidated.
Further, record rates of volume per minute suggest that huge volumes were traded over a short period of time due to the resulting volatility.
While the actual matching engine, trades, and fills were running smoothly, the bottleneck in the fill reports still led to some traders facing massive losses.
Well, got cucked bigtime by FTX lag tonight. Trying short but UI shows no positions. Tried refreshing, nothing.
I short again, refresh, no positions. I relog, no positions. Suddenly such a huge short pops up i see the -pnl and insta have to panic close or might liq, nice
— Gladi (@Gladi_iwnl) November 26, 2020
I was also unable to access my open orders for 15 minutes and sadly had big losses as they didnt show on the positions page and couldnt edit them. Hope @FTX_Official fix their shit in future, this is a bad look https://t.co/63GIbYQ9Zh
— Nacho Trades (@NachoTrades) November 26, 2020
In fact, many traders were so frustrated at the issue at hand that Sam Bankman-Fried, CEO of FTX, had to step in to address the UI lag.
Sorry you're having issues!
Please DM me or email [email protected] and we can look into it; sending many angry tweets before we have a chance to investigate is not going to help anything.
— SBF (@SBF_Alameda) November 26, 2020
SBF also suggested that FTX would look into cases where users intended to send closing orders, but due to delayed fill reports, sent opening orders instead to offer compensatory measures. FTX also announced VIP2 taker fees of 0.0275% for all users, an offer that will continue until the next day.
It will also be taking all the fees on FTX from the last 24-hours and doing a mid-week FTT buy/burn with it. This is anticipated to be around $1 million worth of burning.
FTX has quickly grown into one of the largest crypto-exchanges by volume over the past year with several unique product offerings, the most recent being the launch of spot margin trading.
Calling it a hybrid of how other places have done it, SBF explained that FTX’s spot margin trading will be automatically cross margined with futures in a sub-account.
“There isn’t a separate spot margin wallet or anything like that. We just add up your spot margin positions with your futures positions, and use remaining spot assets as collateral for both.”
However, even amidst these developments, it is unclear how the episode regarding delayed fill reports will impact FTX going forward as a lot of traders lost out heavily over the past 24 hours.