The cryptocurrency exchange OKEx was accused by one of its customers that it allegedly liquidated his large Bitcoin earnings in an illegal manner.
OKEx has establishments in Belize and Hong Kong and is one of Asia’s largest Bitcoin and cryptocurrency exchanges. They have over 20 million customers in over 100 countries.
The OKEx Incident
A lot of aspects from this incident are still unknown. Sources claim someone tried to seek justice at the company’s offices. The customer claimed that millions of dollar worth of Bitcoin were liquidated from his account. More exactly, the liquidation supposedly happened illegally.
The last few days were tough foe bitcoin owners, as the currency plummeted below 7000 USD. But OKEx managed to hit an unrealistic 4750 USD in their Quarterly futures trading. This was 20% below the Global index price, leading to numerous liquidations for people that were stalking the crypto coin.
The irregularities from the exchange led many traders to clash and lose more than money. The aforementioned trader tried to commit suicide inside the OKEx building in Honk Kong by drinking poison because of this force liquidation.
Because of this event, OKEx will reverse all trading irregularities and all withdrawals and deposits have been halted for the time being.
Not much after OKEx released a statement stating that this incident was triggered by several users who closed a large number of positions without taking into account that the prices will suffer a sharp drop.
“We have successfully rolled back the futures contracts data to 4:47:54 Mar 30, 2018 (Hong Kong Time), when the last transaction was completed. All the futures contracts will be delivered at 17:40:00 Mar 30, 2018 (Hong Kong Time) according to the delivery prices listed below.
The transfers between user futures account and spot account will be rolled back as well, and will be processed after futures contracts delivery. We will make further announcement when it is completed,” was OKEx’s most recent response on the matter.
All of this is another reminder that people need to think twice before investing in Bitcoin. When you actually purchase the cryptocurrency it becomes a long-term hold. And while investing in futures contracts may appear to be more convenient, it also comes with obvious disatvantages.
To gain and lose money is an integral a part of cryptocurrency investing as a whole. If futures are liquidated, your earnings are lost forever. Purchasing the crypto itself and holding it in a secure wallet will give the end user more control over his assets.