Technical Failures and Market Manipulation: Chaos on Crypto Exchanges Shakes Investors

Bitcoin Price Falls to Zero – Major Failure at Paradex

A severe technical malfunction has shaken the decentralized derivatives exchange Paradex. Immediately following maintenance work, the Bitcoin price on the platform temporarily fell to zero US dollars. Within seconds, thousands of trades were liquidated before operators could fix the error ^[2].

The Starknet-based perpetuals exchange confirmed the incident in a Discord announcement. Technical lead Clement Ho announced a rollback of the blockchain state: "We have identified the issue and will reset the chain status to block 1604710 (4:27:54 UTC). This is the point before maintenance and the last known correct status" ^[2].

The exchange provided no information regarding the number of affected traders or the volume of liquidated positions. Parts of the platform were temporarily unreachable. A statement on the Paradex website only stated: "Recovery measures are ongoing. We can confirm that all user funds are SAFU." At the same time, users were warned about fake support channels and fraud attempts ^[2].

Rollbacks are considered a last resort in the crypto industry to reverse transactions. The extent to which the incident has led to a loss of user trust remains to be seen ^[2].

Trader Outsmarts Bots and Pockets $233,000

In a separate incident, a sophisticated crypto trader earned $233,000 through clever market manipulation by tricking Polymarket bots. The action took place late on a Saturday evening when trading volumes across the entire crypto ecosystem were particularly low and small buy or sell orders had disproportionate effects on market prices ^[3].

The trader aggressively bought shares in a Polymarket contract on the upcoming price of the Ripple token XRP. The aggressive purchases drove the shares to 70 cents, even though XRP's spot price on major exchanges declined by 0.3 percent during the same period ^[3].

Due to this discrepancy and the apparent arbitrage opportunity it created, Polymarket bots automatically sold more of these shares. This enabled the trader to accumulate a total of 77,000 shares at an average price of 48 cents ^[3].

Two minutes before the deadline expired, a Binance wallet reportedly connected to the trader made a large XRP purchase worth $1 million. This drove the price up by approximately 0.5 percent ^[3].

This price surge ensured that the Polymarket contract was settled as a win, qualifying the trader's shares for a payout of $1 per share – a substantial profit compared to the average acquisition cost of 48 cents. The trader subsequently sold the purchased XRP back on Binance, causing the spot price to drop again ^[3].

The entire operation cost the trader approximately $6,200, while bots lost an entire year's worth of profits overnight. The trader apparently executed the same procedure multiple times. Some bots were shut down in time, while others did not react quickly enough and lost their entire balance ^[3].

IOTA Defies Positive Fundamentals

While the IOTA price has recently declined sharply, fundamental developments are intended to drive adoption of the crypto project. These include the ADAPT initiative in cooperation with the African Continental Free Trade Area, as well as significant technical milestones to improve the network's interoperability and liquidity ^[1].

The "Rebased" project is modernizing the technological foundation, while the integration of LayerZero and Stargate is intended to create a bridge to over 150 other blockchains ^[1].

Despite these catalysts, the chart pattern shows a wait-and-see attitude. The most recent closing price was $0.0852. With an RSI value of 44.0, the market reflects a neutral phase without clear overheating ^[1].