[modeless]

This was not a technical issue. Everything worked exactly as designed. A large market sell order reduced the price to a level that triggered other sell orders (a combination of "stop-loss" and forced liquidation for margin positions) in a cascade. This was a flash crash that was over within a few seconds, so other markets did not react.

The issue is that there are a lot of inexperienced traders on GDAX right now and they were recklessly trading on margin and/or setting stop-loss orders without understanding the possible consequences.

[vii]

During the crash, if the market were functioning normally, people could have bought cheap ETH in the ETH-USD market and sold it at nearly the normal price via the ETH-USD and BTC-USD markets all without leaving GDAX. Their outage page has the grace to mention that there were slowdowns.

A few seconds is normally long enough for liquidity to transfer between markets and this time it wasn't. That's the issue