OKEx exchange denies allegations it manipulated the crypto markets

Customers of the OKEx cryptocurrency exchange woke up recently to find that the exchange had fooled around with options on its platform. OKEx had settled Bitcoin BCH futures contracts with virtually no warning prior to last week’s hard fork of the BCH blockchain, leading to what some are calling “multi-million-dollar” losses. In fact, one investor said that his fund dropped $700,000 almost instantaneously because OKEx closed the contracts at a level different than what was reflected in market prices. The decision has caused a hurricane of bad press for the exchange, with many calling for an investigation. As is to be expected, the exchange has publicly come forward to that it did nothing wrong.

A Medium user, “AMBER AI,” addressed the issue in a recent post, accusing OKEx of “outright market manipulation and one of the more serious acts of fraud in the history of limit order book trading in the cryptocurrency markets.”

The poster added that traders have lost as much as $24 million over the decision. The post continues, “The course of events surrounding the BCH hard fork are indicative of market manipulation, fraud and deceit.”

After OKEX made the move, it weakly tried to explain its decision as a means to protect user assets. It said, “It has come to our concern that an early announcement may make room for market manipulation and cause loss to our users. Therefore, we decided to give a short notice in order to maintain the fairness and stability of the market.”

In response to the accusations levied against it by AMBER AI, it said, “In the absence of evidence, Amber AI alleged us for trading against our own customers and manipulating the markets. These are completely false allegations and the defamatory statements have caused serious damages to OKEx’s reputation.”

Its reputation was already damaged, due to its own decisions. This past August, the exchange froze a user’s account and began a forced liquidation because the user took a long position of 4,168,515 Bitcoin futures contracts. OKEx then contacted the user and asked him to lower the position, a request that was refused. The exchange had no business getting involved with the user’s actions.

OKEx has apparently had its feelings hurt by the AMBER AI Medium post. It said that it is considering legal action against the user. Given that the Hong Kong Securities and Futures Commission could be poised to investigate OKEx over its handling of the contracts, a post on Medium seems to be the least of its problems.

Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.

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Kraken’s crackin’ up

The Kraken cryptocurrency exchange is having a difficult time adjusting to the Bitcoin BCH hard fork. The exchange, which is backed by Bitcoin.com’s Roger Ver, called out BCHSV after the network upgrade, accusing it of not being a viable option, as it had no known replay protection and no support from major block explorers. Despite BCHSV apparently being a very bad idea and “an extremely high risk investment,” the exchange is moving forward with plans to support it.

Kraken’s own statement on BCHSV even says that “Some large holders have indicated they’d be dumping everything ASAP.” The exchange has repeatedly tried to push BCHSV under the bus for not being legitimate, which is surprising given that it admits, “Kraken has done only very minimal code review.”

Kevin Pham – crypto fan, Ethereum investor and outspoken voice of reason, decided to call out Kraken over its decision. When Kraken announced, “Kraken will credit client accounts with BSV and launch BSV trading at approximately 15:30 PST today, November 18th, 2018. The BSV order books will come online first, then accounts will be credited with BSV a short time later,” Pham wasted no time in reacting. He said on Twitter, “So you’re going to steal from BSV fork hodlers who are prudently waiting for the war to end before making an investment decision?”

Pham wasn’t done. He later targeted the exchange’s CEO, Brian Armstrong, directly, tweeting, “And Brian, Didn’t the ETC clusterfuck teach you to not listen to cult leaders and prematurely pick sides?
How are you still CEO?”

Kraken has already (erroneously) said that BCHSV is going to fail. If it believes that this could happen, it certainly doesn’t seem like a wise business decision to launch support of the cryptocurrency.

Pham, who is attributed with being a key figure in the ousting of Wells Fargo’s former CEO, John Stumpf, wasn’t done showing Kraken for what it truly is. He said in a recent Twitter post, “Coinbase has always been a political exchange. Sadly, Kraken now falls into that category now. Bullish on @binance, @Poloniex, @Gemini, @bitfinex? & @bitFlyer. Let me know of any other non-political exchanges that put user’s interests first.”

The California native knows his stuff and isn’t afraid to speak his mind. He is able to see through the fog and understand the bigger picture in a way that most people can’t. This is probably what led him to tweet yesterday, “ETH & ABC support cult leaders, short-sighted behavior (checkpoints/bailouts) & shitcoinery. BTC & SV support sound money & strict adherence to consensus rules. Bitcoin is ultimately an idea based in economic reality, not a ticker symbol. Not choosing a side is choosing a side.”

Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.

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Exchanges selling BCHABC could be conducting fraud

In anticipation of the Bitcoin Cash hard fork last week, two cryptocurrencies were launched—BCHABC and BCHSV. Each corresponded to one of the two camps that were pushing BCH’s divide, but only one has the potential to be considered a fraudulent pump-and-dump scheme—BCHABC.

Medium user “Without Fear” provides a considerable amount of data to support that belief in a recent thread on the social media platform. Before anyone goes off the deep end and accuses Without Fear of being nothing more than a puppet for BCHSV, it would be in their best interest to read the post and understand better the scenario.

Without Fear points out that, prior to the hard fork, “[W]e have hash that wasn’t mining BCH before the fork, which means that (without looking at it) this is either pragmatic hash that makes money by selling the ABC coins they mine, or hash rented by the people who wanted or believed in the ABC ruleset. However it became clear after the following announcement by Bitcoin.com that a lot of the hash that would mine BCHABC the day of the fork would be stolen hash from Bitcoin.com pool miners.”

The author goes on to show that there have been a number of mining pools that have stolen hash from their customers in order to point them to BCHABC proponent Bitcoin.com, including Antpool, viaBTC and BTC.TOP, creating a pool that post’s author refers to as BABV. This hash, asserts Without Fear, is unstable and is being mined against the market’s wishes—it is forced hash.

He also shows how the Kraken exchange is trying to manipulate public sentiment. Kraken is backed by Bitcoin.com’s Roger Ver and recently stated that it will support BCHSV, but warned that Bitcoin SV “should be seen as an extremely high risk investment, citing several “red flags”: BCHSV has no wallets that support replay protection, it has no support in major block explorers and because miners are subsidized or operating at a loss, among others. This is a blatant disregard of the facts and a manipulation of the truth. Neither BCHSV nor BCHABC offer replay protection and BCHSV most definitely has support in block explorers. There is no evidence to support the fact that BCHSV miners are being subsidized, whereas Without Fear provides several examples of how BCHABC is subsidized. Ver himself has even admitted to it, telling CoinGeek’s Calvin Ayre that Bitcoin.com can subsidize BCHABC with 4000 petahashes for a decade.

So, where does this leave us? BABV is a pool that is creating hash that is supposed to be mined elsewhere, but whose components have been pointed by the pool operators—not the miners—to mine BCHABC in an attempt to signal market strength. As Without Fear correctly ascertains, “However, this is not real demand, the machine owners never asked or consented to mine BCHABC. This is being done behind their back while they are paid as if machines are mining BTC, or whatever is most profitable.”

In the absence of true market demand, the forced hash will revert to its original source and BCHABC will, by default, stop progressing. Explains Without Fear, “Considering that ABC hash support was 800 when the BCH price was around $500 and that the current BCHABC price is less than $300, such plunge in hash would spiral out of control and lead to a full halt in what these exchanges have labelled as the “BCH” chain. The portfolios of people who held BCH before the fork would now be worth zero while the BCHSV chain keeps being mined.”

Without Fear’s advice is simple and insightful: “[S]teer clear of exchanges that try to sell ABC as ‘BCH’ as ABC is extremely unstable and not comparable to your BCH holdings.”

Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.

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