ETH price went to $13 from $319 in seconds on GDAX crypto-currency exchange on Wednesday 21st June'17.
CAUSE : Someone dumped ETH worth millions to market SELL causing drop from $319 to $224 which further leads to chain reaction of margin funding liquidations, about 800 stop loss orders executed. Margin funding is trading with borrowed funds. Liquidation happens when positions are closed automatically to prevent further loss. Eventually, it has rebounded from flash-crash to about $325.
Screenshot of GDAX ETH/USD chart indicating price drop:
Although it looks like some glitches or security breach at first sight but Adam White confirmed the exchange operates as expected and denied to revert the transactions. After this flash crash we get to know how risky Crypto Margin Trading is.
Our initial investigations show no indication of wrongdoing or account takeovers. We understand this event can be frustrating for our customers. Our matching engine operated as intended throughout this event and trading with advanced features like margin always carries inherent risk. - Adam White (VP @GDAX)
Although Reddit users shows their grievances of the event :
