Isn't this almost exactly the opposite of the problem here?

What appears to have happened here is something completely unrelated to the technology. The same thing could have happened in any financial exchange.

There were two difference that made it possible here: 1) the investors may have been technical experts but were financially naive and dramatically underpriced the risk, and 2) the market was completely unregulated, so the financially naive investors had no protection from those who weren't so naive.