OKEx is one the largest digital exchange well known to the crypto world founded by ‘Star Xu’ in year 2014 head quartered at Hong Kong. The exchange recently invested $420 Mln worth of BTC into the Bitcoin futures, forced to liquidate the account after the price of bitcoin tumbled this week earlier. In Bitcoin future markets, the profitable traders can be forced to cover the losses if a position is liquidated also known as a ‘clawback model’ or ’socialised trading model’ depending on bitcoin price movement.
Following such a socialised trading model in the futures trading, during the settlement time at 16:00 as per Hong Kong time, profitable holders were forced to cover some loss. However, this model served for protecting investors in the event of worst case scenarios covered just 10 Bitcoins. The rest remaining loss was waved off by the company injecting a total of 2,500 BTC into the insurance fund.
The company’s official statement was announced today stating:
“An enormous long position in Bitcoin futures contract was force-liquidated at 20:17:14 July 31, 2018 (Hong Kong Time, UTC+8). Due to the sheer size of the order, our risk management system may be triggered to activate the societal loss risk management mechanism”.”
Furthermore, the OKEx exchange declared implementing new precautionary measures to prevent these kind of things happening again in the future by introducing a ‘Anti Manipulation Policy’ from tomorrow i.e from 4th August.