Some HFTs stopped supplying liquidity during flash crashes, others didn't. The ones who didn't were actually the ones to end the flash crash; they see great bar

Some HFTs stopped supplying liquidity during flash crashes, others didn't. The ones who didn't were actually the ones to end the flash crash; they see great bargains and buy them up. The main reason HFTs pull out of markets during flash crashes and similar events is regulatory (broken trades). The only HFTs who can stay in the market during a flash crash are the ones who believe they can predict the retroactive actions of human regulators. Obviously this will only be a small subset of HFTs. If you want to change this, eliminate the breaking of "clearly erroneous trades". (Japan doesn't have this rule and they do fine.)