Zhao Changpeng: The flash crash of the BTC/USD trading pair was caused by instantaneous price fluctuations due to low liquidity, without any liquidation occurring

Solv Protocol's Head of Business Development, Catherine, stated, "Binance and USD1 launched a 20% fixed annual deposit promotion, leading many users to exchange USDT for USD1, which caused USD1 to experience a premium of about 0.39% at one point. Some funds were then borrowed through the Lista DAO lending market, using SolvBTC or SolvBTC-BTCB as collateral to borrow USD1, and gradually sold in the spot market to meet demand. During this process, some traders directly sold BTC using market orders through the BTC/USD1 trading pair. However, due to the extremely thin liquidity of this trading pair, a single large market order quickly swept away the buy orders, briefly lowering the BTC price, which was then quickly bought back by arbitrage bots to restore the price.

Zhao Changpeng, CZ, clarified regarding this incident, "This actually indicates that the trading platform did not participate in the related transactions. Due to the low liquidity of the newly launched trading pair, a large market order can cause a momentary price spike, but arbitrageurs quickly correct the price back to normal levels. At the same time, since this trading pair was not included in any index, it did not trigger any liquidation."