Bitcoin, Crypto currency, Blockchain

Forced liquidation in OKEx: now have To pay for it all?

a3414493f97c95c4e46738c3453c9bc4 - Forced liquidation in OKEx: now have To pay for it all?


On the Exchange OKEx it came on the 31. July to a Forced liquidation of a Bitcoin Long Position in value of 460 million US dollars. OKEx, however, was only able to liquidate 40 million of them actually, the rest of the 420 million are currently still open. Now the Support of OKEx expressed concern that the sum could be socialized.

On the Exchange OKEx a Trader has taken a Long Position with an extremely high sum. So he has the use of 950 Bitcoin, at the current Bitcoin rate leveraged just over 7 million US dollars, up to a total value of 460 million US dollars. However, he was not expecting, however, with a fall, such as the Bitcoin, just on 31. July put. So the value of Bitcoin contracts fell more than traders provided the sum, of the levers together broke in.

Now the Exchange OKEx does not have to liquidate only the value of the 950 Bitcoin, but the whole of the 460 million US dollars, were moved. The Problem: OKEx far it has been only around 40 million US dollars. The Insurance Fund of the Exchange, which is actually there, the System in doubt, catch, includes only 10 Bitcoin.

The OKEx now

On Friday 03.08. OKEx on the Support-platform applied finally to word. The Team outlines how it would like now to deal with the Situation. Given the size of the liquidity ends of the Long Position it is forced, the Societal Loss Risk Management Mechanism to trigger – a mechanism for the mutualisation of liability.

“If the Insurance Fund cannot cover the whole of the Margin Call losses, a full Clawback. This is the only user that can achieve in all three contracts for a net profit. We will take a portion of the profit to the same percentage of all of the purchased traders to cover the difference between the liquidated price and the fixed price.“,

it is stated on the page.

OKEx also, that you always try to avoid Clawbacks. Instead, they wanted to improve the General that it is not covered by a community approach in risk Management. Among the measures referred to early, forced liquidation systems, and order price adjustments rules, among other things, the introduction of a price limit. In addition, the Insurance Fund is made up to 2500 BTC from the private stock of capital in the stock market.

In the course of August if you want to accelerate in addition, a couple of developments on the platform. So the 4 to. August, an Anti-manipulation Policy will be announced. A tiered Margin System and an improved process of Forced liquidation is to follow at the end of August. Also, the use of Insurance Funds you want to build. In order to prevent a similar bad experience as the current in the future.

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