$60M Crypto Longs Wiped Out by Stock Market Glitch

Trade.xyz has started to repay traders whose leveraged trades were cancelled after a stock glitch erased $60 million in crypto longs. This incident highlights how one mistake in the traditional stock market can easily carry over to the world of on-chain derivatives.

The situation unfolded on July 27 when a single wrong SK hynix order in South Korea led to around $60 million in long liquidations on Hyperliquid. The trading platform trade.xyz, which tracks the dollar value of one share of SK hynix, stated that its mark price dropped by 18.7% almost immediately.

According to Galaxy Research, approximately 960 accounts were liquidated with long positions amounting from $57 million to $80 million. Trade.xyz has announced that it will repay the affected traders using the reference rate of $1,115.5.

The incident emphasizes the significance of builder markets within Hyperliquid's ecosystem. Trade.xyz, a perpetual futures branch of tokenization protocol Unit, was the first market to open under Hyperliquid's HIP-3 enhancement and has made up over 90% of HIP-3 open interest.