Crypto.com was one of the few crypto exchanges to keep LUNA trades open when Terra’s death spiral saw an irreparable price drop of LUNA and stablecoin UST. However, a technical glitch in Crypto.com’s mobile application allowed users to temporarily walk away with a 30x to 40x profit on LUNA trades.
On Friday, Crypto.com abruptly banned users from trading after an internal tool found that the system was mispricing LUNA due to an error. Just as Crypto Twitter started raising concerns about trade reversals in the stock market, Crypto.com CEO Kris Marszalek revealed details of a glitch that allowed users to rake in massive profits.
There were many customers who bought at the wrong price and some, of course, also took the opportunity to make the most of the glitch.
We reversed ALL trades.
Some customers saved a lot of $ and thank us, others didn’t abuse the mistake and thrash us.
-Kris | Crypto.com (@kris) May 13, 2022
According to Marszalek, users who traded “during that 59 minutes” are eligible for a buyback option at the market price of LUNA token, which has fallen to $0.0004685 at the time of writing. It’s important to note that LUNA will be released on April 5th.
Marshall notes:
“The main cause was a combination of multiple external factors (tick size changes due to Luna’s death spiral, withdrawals and the halting of the entire Luna chain) that combined resulted in price shifts that should normally be captured by index prices, but weren’t. “
After a day’s recap of the LUNA trading debacle, Marszalek shared that “all user accounts have been reactivated.”
While Crypto.com reversed the LUNA transactions, the company offered its $10 in-house token Cronos (CRO) as a goodwill gesture to affected investors.
Related: Breaking: The Terra blockchain has been officially halted after the LUNA price collapse
When LUNA’s price plummeted more than 99%, validators for the Terra blockchain officially halted the network to prevent governance attacks.
The Terra blockchain has officially stopped at a block height of 7603700.https://t.co/squ5MZ5VDK
The Terra validators have decided to stop the Terra chain to prevent serious governance attacks $LUNA Inflation and significantly reduced attack costs.
— Terra (UST) Powered by LUNA (@terra_money) May 12, 2022
Validators are expected to restart the network only after they implement a new patch to disable further delegations.
The patch release is here: https://t.co/BZ8t86cuwA
Delegations will be disabled once block production resumes.
The network should go live as soon as 2/3 of the voting rights are online. An update will be provided accordingly. https://t.co/vffpjw7uom
— Terra (UST) Powered by LUNA (@terra_money) May 12, 2022