What Regulatory Mechanisms Are in Place to Prevent or Mitigate Flash Crashes in Traditional and Crypto Markets?

Traditional markets primarily use "circuit breakers" or "volatility halts," which automatically pause trading when prices drop by a predetermined percentage within a short period. This pause allows for order books to be reset and liquidity to return, mitigating extreme slippage.

Cryptocurrency exchanges may implement similar voluntary halts, though regulation is less uniform. Automated systems also monitor for erroneous or manipulative trades to prevent them from triggering a crash.