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KRAKEN Feb 22, 2021 Flash Crash and Our Experts' Role in a Prior Systemic Crypto Platform Failure


THE 2021 FLASH CRASH

On Feb 22, multiple crypto pairs prices deviated from their market value on cryptocurrency exchange Kraken. ETH crashed over 50% compared to its market value, while ADA and BTC also saw price dips that didn’t match the market. [1]


According to Reddit posts, several investors experienced losses, including a NYC hedge fund. Its $400 million account was allegedly wiped out because of margin calls were triggered following the flash crash. [2]




THE EXPERTS' ROLE


Our experts were retained by Silver Miller on behalf of the claimants in a prior 2017 crypto systemic platform failure to:

  1. Analyze a pair prices on a crypto exchange during the month of May 2017, and compare them against the market price in another highly active and liquid exchange;

  2. Estimate a pair prices on a crypto exchange during May 7, 2017, and compare to the market prices; and

  3. Analyze the reasonableness of the leverage and margin protocols on a crypto exchange with respect to its customer system.





EXPERTS RETAINED


Damiano Colnago


Damiano Colnago is a Managing Partner at SEDA Experts, specializing in complex structured finance products with a particular focus on custody and trustee services, collateral and fund administration. His expertise includes banking operation, collateralized debt obligations (CDOs), collateralized loan obligations (CLOs), fund of funds, derivatives (including CDS, IRS, FX swaps and forward contracts), asset-backed securities (ABS), mortgage-backed securities (MBS), syndicated loans, and cryptocurrencies.


Click here for his bio



Robert M. MacLaverty



Robert MacLaverty is a Senior Economic Consultant with Compass Lexecon based in Chicago and New York. He specializes in providing financial, economic and testifying expert services to the nation’s leading law firms, investment banks, pension funds, endowments and foundations. Mr. MacLaverty spent the majority of his 18-year Wall Street career in trading and institutional sales of taxable fixed-income securities, derivatives and structured products. After beginning as a financial analyst and derivatives specialist with Morgan Guaranty Trust Company of New York (J.P. Morgan), he worked with CS First Boston (Credit Suisse), Continental Bank (Bank of America), Bear Stearns and Morgan Stanley. He was also a floor trader at the Chicago Board of Trade, serving on numerous committees as an independent member. His combination of prior industry and expert experience provides a unique breadth to his practice.


Click here for his bio



[1] https://cryptobriefing.com/kraken-users-threaten-lawsuit-over-flash-crash/

[2] https://www.reddit.com/r/CryptoCurrency/comments/lprleo/nyc_hedge_fund_wiped_out_ethusd_flash_crash_to/


ABOUT SEDA


SEDA Experts is a consulting firm specializing in financial services. We provide superior independent advice, expert witness services, data analytics, and valuation services to law firms in both litigation and business contexts.


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Our experts have unmatched industry experience in a vast array of financial services practices. With decades of industry experience as senior executives and global managing directors at leading financial institutions, consulting firms, and regulators, each of our financial expert witnesses is dedicated to applying exceptional real-world economic, financial, and quantitative principles to complex business and legal challenges.


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