Arkham denies buggy Mt. Gox alerts to blame for 7% Bitcoin price crash

The price of Bitcoin (BTC) nosedived roughly 7% in just one hour, falling from $29,850 to $27,789, which media outlets reported was due to blockchain analytics firm Arkham Intelligence incorrectly sending out an alert that wallets linked to Mt. Gox and the U.S. government had begun shifting large sums of Bitcoin.

Arkham initially tweeted to confirm the alleged mistake had occurred as a result of “bug fix” which sent out a false alert on their analytics platform to a “small subset of users.” The alert was subsequently tweeted by the popular crypto news alert account DB or Tier10k.

[DB] Mt Gox and US Govt Wallets Making Transactions: Arkham Alert

— db (@tier10k) April 26, 2023

However, one hour later Arkham published a follow-up tweet claiming that it had “conducted an investigation of the DB Alert situation, and determined that the Arkham alerts were sent accurately in this case.”

We have conducted an investigation of the DB Alert situation, and determined that the Arkham alerts were sent accurately in this case.

DB set two alerts on all Bitcoin transactions above $10k USD, with no counterparties set, then named the alerts “Mt Gox” and “US Gov”.

When we… pic.twitter.com/8OITiygNhL

— Arkham (@ArkhamIntel) April 26, 2023

“Neither the alert nor the tweet could have caused the sharp BTC price drop today,” wrote Arkham, highlighting that the drop occurred between 19:17 and 20:01 UTC, and the alerts and subsequent tweet were sent afterward at 20:07 UTC and 20:08 UTC.

Additionally, according to data published by Twitter user IT Tech, there have been no transfers from the wallets associated with Mt. Gox, suggesting that Bitcoin’s flash crash could have occurred for reasons unknown to market participants at the time of writing.

FAKE NEWSabout MT Gox wallets making transactions.

No activity there✅ https://t.co/IbZKrK7BJ9 pic.twitter.com/mdOZv4nzI4

— IT Tech (@IT_Tech_PL) April 26, 2023

According to data from blockchain explorer Blockchain.com, a Bitcoin address believed to be the U.S. government’s wallet for Silk Road hack funds did witness a transaction on April 26. However, it was an inbound transaction worth only $0.19 which was still processing at the time of writing.

Related: First Republic Bank dives another 20% with Bitcoin ‘ready for $40K’

Regardless of what caused the flash crash, the sudden and steep decline in prices wreaked havoc on the derivatives market, with the total sum of liquidations for crypto market participants topping $211 million at present. Bitcoin traders accounted for nearly $97 million worth of these liquidations.