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"Cryptocurrency proponents often cite Citadel interfering in Gamestop trading as an example of the opaque, centralized (and bulldozery) manipulation that they a

"Cryptocurrency proponents often cite Citadel interfering in Gamestop trading as an example of the opaque, centralized (and bulldozery) manipulation that they are fighting against." This has an air of mob justice to it. If enough people believe it, that does not make it the truth. It is not established that Citadel interfered and they have flatly denied all accusations. Griffin has denied it under oath. People who are tempted by this truthy narrative should think back to the "flash crash" of 2010. For years, the mob treated it as common wisdom that the event was caused by rogue high-frequency trading. Years later it came out that the responsibility was with (1) an unsophisticated trader interacting with a GUI who was knowingly and regularly breaking market rules and (2) the exchange he was operating on did not have adequate market-abuse monitoring.

Ntrails 5y ago
I have explained multiple times why trading got shut down, how robinhood got caught short of margin, how we can literally see from released data that Citadels flows were not particularly sided. Never the less, the same people who now understand what happened continue to use it as a hill to stick an anti establishment flag upon
- nceqs3 5y ago
  Meanwhile the PE firms that owned the bonds are now converting them into equity, dumping it on retail and cashing out. DUDE WE ARE STICKING IT TO THE MAN SO BAD. SILVER LAKE IS JUST LIKE US.
- wallacoloo 5y ago
  i think it’s just bad UX. my understanding is that Citadel acts as the market maker for Robinhood. if it ever can’t provide liquidity for a trade, you need to handle that case explicitly. make it clear to the user where liquidity comes from and how much of it there is, otherwise they can’t reach for any cause besides “Robinhood (Citadel) decided to pull a switch”. order books used to serve that role: i’m not sure what the solution is in this era of HFT.
  - deleted 5y ago
    [deleted]
  - cturner 5y ago
    If you have queries about flows from a US broker to market makers, you can look for the 606 and 607 reports on their website. e.g. https://robinhood.com/us/en/about/legal/ https://robinhood.com/us/en/about/legal/ "you need to handle that case explicitly .. order books used to serve that role: i’m not sure what the solution is in this era of HFT." This is addressed by a Smart Order Router.
dvlsadvoxate6 5y ago
maicro 5y ago
Setting aside anything else going on, thank you for bringing up and clarifying the 2010 flash crash - I had only ever heard the high-frequency trading theory (with a side order of "nobody actually understands what the bots were thinking").
armchairhacker 5y ago
I think the larger issue (which Vitalik actually mentions a lot in this article) is that crypto is also bulldozery and the same stuff can happen. In fact, something very similar did happen when etherium forked after the [edit] DAO hack. At the end of the day, whoever has the resources has the power.
- leppr 5y ago
  The Ethereum hard fork was in 2016 after the hack of a project called just "DAO" [1]. No other on-chain event since then, including the recent BadgerDAO hack, motivated a hard fork. Vitalk's article is quite precise about these subtleties, concluding that crypto is generally vetocracy at the lower level and bulldozer-y higher in the stack. [1]: https://en.m.wikipedia.org/wiki/The_DAO_(organization) https://en.m.wikipedia.org/wiki/The_DAO_(organization)
will4274 5y ago
> Years later it came out [...] Maybe. Wikipedia has a lot more to say https://en.m.wikipedia.org/wiki/2010_flash_crash https://en.m.wikipedia.org/wiki/2010_flash_crash. More than a few folks quoted there seem to say that while this is what the final SEC report said, it's basically ludicrous to blame an individual and doesn't match the data very well.

Ntrails 5y ago

I have explained multiple times why trading got shut down, how robinhood got caught short of margin, how we can literally see from released data that Citadels flows were not particularly sided. Never the less, the same people who now understand what happened continue to use it as a hill to stick an anti establishment flag upon

nceqs3 5y ago
Meanwhile the PE firms that owned the bonds are now converting them into equity, dumping it on retail and cashing out. DUDE WE ARE STICKING IT TO THE MAN SO BAD. SILVER LAKE IS JUST LIKE US.
wallacoloo 5y ago
i think it’s just bad UX. my understanding is that Citadel acts as the market maker for Robinhood. if it ever can’t provide liquidity for a trade, you need to handle that case explicitly. make it clear to the user where liquidity comes from and how much of it there is, otherwise they can’t reach for any cause besides “Robinhood (Citadel) decided to pull a switch”. order books used to serve that role: i’m not sure what the solution is in this era of HFT.
- deleted 5y ago
  [deleted]
- cturner 5y ago
  If you have queries about flows from a US broker to market makers, you can look for the 606 and 607 reports on their website. e.g. https://robinhood.com/us/en/about/legal/ https://robinhood.com/us/en/about/legal/ "you need to handle that case explicitly .. order books used to serve that role: i’m not sure what the solution is in this era of HFT." This is addressed by a Smart Order Router.

dvlsadvoxate6 5y ago

maicro 5y ago

Setting aside anything else going on, thank you for bringing up and clarifying the 2010 flash crash - I had only ever heard the high-frequency trading theory (with a side order of "nobody actually understands what the bots were thinking").

armchairhacker 5y ago

I think the larger issue (which Vitalik actually mentions a lot in this article) is that crypto is also bulldozery and the same stuff can happen. In fact, something very similar did happen when etherium forked after the [edit] DAO hack. At the end of the day, whoever has the resources has the power.

leppr 5y ago
The Ethereum hard fork was in 2016 after the hack of a project called just "DAO" [1]. No other on-chain event since then, including the recent BadgerDAO hack, motivated a hard fork. Vitalk's article is quite precise about these subtleties, concluding that crypto is generally vetocracy at the lower level and bulldozer-y higher in the stack. [1]: https://en.m.wikipedia.org/wiki/The_DAO_(organization) https://en.m.wikipedia.org/wiki/The_DAO_(organization)

will4274 5y ago

> Years later it came out [...] Maybe. Wikipedia has a lot more to say https://en.m.wikipedia.org/wiki/2010_flash_crash https://en.m.wikipedia.org/wiki/2010_flash_crash. More than a few folks quoted there seem to say that while this is what the final SEC report said, it's basically ludicrous to blame an individual and doesn't match the data very well.