OKEX had a bug yesterday that allowed users to transfer USDT between accounts which didn't deduct it from the senders balance.
This probably explains the dump to 6k (and immediate buy back) on okex yesterday since whoever did this probably wanted as much tether as possible to double it, ending up in a dump on OKEX's most liquid market.
A couple of hours after the 6k dump, BTC began dumping with no end in sight.
Whoever exploited it most likely used the tether to buy other crypto within the exchange and transfer out (to not raise alarms), this checks out if you look at ETH-USDT on OKEX at around the same time - 10 GMT, May 22.
Other tether exchanges and market makers were most likely notified about it which's why there were no large buy orders coming in even at key support levels.
You'll also notice the dump stopped around the time OKEX updated their statement (User balances error) and buy orders began coming in. Probably exchanges/MMs got back in at the time?
We've no idea how much they lost with this exploit, but let's see how it affects the market considering they were accused of ~90% fake volume and are likely to be colluding with other MMs/exchanges to control prices.
If they ended up losing most of their tether, it could be hard for them to maintain prices within their exchange unless they dumped their own reserve BTC or got help from Finex/Binance etc.
How exactly did they exploit this? Please explain I'm not too technical.
I remember last time from the Binance fiasco, the hackers basically phished running Google ads. But how exactly did they even pull this off? Just curious, asking for a friend.
Caleb Stewart
Isnt okex bigger than binance
Charles Hernandez
does anyone know what exchange today's huge dump started on?
Liam Turner
This story doesn't add up. All they would have to do is transfer USDT back and forth to accumulate in $ terms. BTC wouldn't need to be involved.
There needed to be a noticeable BTC pump if these guys actually bought 5K worth of BTC to dump on.
Jose Phillips
Theoretically they transfer USDT between their own accounts and get 2x the amount every time they do it.
There are a bunch of ways they could have approached it, looking at charts @ OKEX at the time BTC market dumped with 2kish BTC to 6k and ETH jumped up to 730-740.
From what I heard a couple of hours after it happened, people were able to do it with only USDT. Based on that, most likely they market dumped a ton of BTC to get as much USDT as possible. Bought ETH (and/or a bunch of other alts) to not raise alarms with one huge transfer and transferred them all out to other exchanges where they could've either
1. Switched to BTC and began market dumping to get as much USDT as possible before withdrawing.
2. Just switched to BTC, but OKEX had to market dump their BTC reserves to get back the tether to balance their books since all these tether exchanges collude with each other for liquidity
It's more likely 2. happened since if they did dump and try moving USDT out of any of the other tether exchanges they could get frozen there considering Finex owns Tether and all of them would've been notified about it.
We'll never know what the truth is but the market gave it away yesterday when the rumors came out and a relatively liquid buy side vanished on all USDT exchanges even at key support levels.
Bentley Green
>pair BTC with vaporware token that we have meme'd the entire crypto world to believe has value >this token get exploited in double spend attacks and other dupe attacks since it's not a work-secured chain
Wow, who would've saw this coming? It's almost as if why we don't trade BTC vs ETH smart contract pajeet tokens with overrun exploits left and right.
Brody Barnes
>circulating on chinese social media Are you people so gullible?
Jace Price
The last time manipulation happened in the OKEX futures market (Large dump to 4.8k on spot), their alarms were triggered and they halted everything at the exchange.
Whoever did this probably didn't want to set off alarms and tried pulling it off the least suspecting way as possible while not raising too many alarms. Sounds like it was done by people in the know - intentional bug in code maybe?
Another interesting piece of info's their CEO switched to a rival exchange, Huobi just this last week..
