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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There are constant whispers – and sometimes outright shouts – that the cryptocurrency industry will eventually be limited to only a small handful of options. This will be based on those coins that have showed more usefulness to the entire financial ecosystem and will eventually lead to the removal of the majority of the more than 1000 digital currencies that are now available. This is going to be the next step in crypto’s maturity as it continues to evolve into an acceptable currency and could already be on its way.
Hong Kong’s OKEx exchange has announced that it will delist 42 trading pairs as of October 31. It explained that the decision to remove the coins was based on the fact that they have poor liquidity and/or low trading volumes. The company’s Head of Operations, Andy Cheung, stated, “Being listed is not the final step, keeping up high productivity and efficiency plays a major role to success. Housekeeping is important, our main responsibility should be to maintain a robust environment in the market to expand and provide the most suitable trading experience to our users.”
OKEx users who have holdings in the target coins are recommended to cancel any pending orders. If they’re not, the exchange said that it will cancel the orders and credit the asset(s) to the user’s trading account.
The company further indicated that only the trading pairs that have low trading volumes and/or weak liquidity will be delisted, but the underlying tokens will remain. Cheung added, “We have to admit that there are projects and projects in the blockchain space, and some are underperforming against our expectations. That’s why we had to take some action to deal with this problem.”
Although the exchange points out that it isn’t delisting the coins themselves, it shows that the crypto space is closely watching activity and is willing to take the necessary measures to reduce access to those coins that do not perform per certain standards. This will, eventually, lead to them dropping off the radar completely.
OKEx is the second-largest crypto exchange by trade volume, according to CoinMarketCap. It has a 24-hour volume of $507.94 million and a seven-day volume of $2.62 billion. It falls behind Binance, which has a 24-hour volume of $750.48 million and a seven-day volume of $3.63 billion.
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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