2500 Bitcoin [BTC] to be injected into OKEx forced liquidation insurance fund

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2500 Bitcoin [BTC] to be injected into OKEx forced liquidation insurance fund

Post by magic8ball » Fri Aug 03, 2018 5:43 pm

OKEx released a statement today detailing the forced liquidation of an “enormous long position” in futures on July 31st. They also informed users that their risk management system might be triggered. They stated that they will be injecting 2500 Bitcoin [BTC] into their liquidation insurance fund from their own capital pool to offset the potential market risk.

On 31st July, a Bitcoin whale wished to liquidate a $460 million long position. After trying to prevent the client from opening the position to reduce market risks, OKEx froze the account. This was then followed by a drop in the price of Bitcoin due to market movement, which caused the liquidation of the account.

This means that, due to OKEx’s clawback policy, futures traders on the platform may have to pay around 18% of their profits to cover the shortfall from liquidating the position. In OKEx’s own words, their policy is described as:

When the insurance fund cannot cover the total margin call losses, a full account clawback occurs. In such case, only users who have a net profit across all three contracts for that week will be subject to the clawback. We will take a portion of the profit in equal percentage from all profited traders only to cover the difference between the liquidated price and settled price.”

https://ambcrypto.com/2500-bitcoin-btc- ... ance-fund/

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