On Friday, Hong Kong-based exchange OKEx announced that it will reverse transactions that were carried out from 4:47 am to 6:30 am Hong Kong Tim,e when Bitcoin futures inexplicably plunged as low as $4,755 on OKEx, despite the average Bitcoin prices remaining above $7,000.
According to the announcement, the rollback will undo transactions going back to 4:47 am HKT and will take place at 3:30 pm HKT today. “To prevent forced-liquidations due to price differences after the settlements in “bi-weekly” and “quarterly” futures contracts, we will rollback the transactions as mentioned, and all futures contracts will be delivered at 00:00 Mar 31, 2018 (Hong Kong Time),” read part of the statement.
The move follows widespread protests from OKEx customers which included one person who threatened to commit suicide outside the company’s headquarters. The man claimed that he had lost more than $10 million through forced liquidation and threatened to take his life if the anomaly was not rectified.
Repairing the Damage
Bitcoin News reports that the announcement came in the wake of widespread condemnation by the platform’s users who opined that the OKEx’s system was unable to prevent what was interpreted by the majority as a maliciously-intended activity. Some investors in the social media platforms went as far a claiming that OKEx itself was behind the alleged manipulation. OKEx has however responded to the allegations. “OKEx always has the customers’ best interests at heart, and we are dedicated to providing the best products and technologies to protect our customers. Transactions were suspended for several hours due to the incident. Please accept our sincere apologies for the inconvenience caused.”
Screen captures shared on Twitter show that during the period, the price of Bitcoin futures on OKEx first started to fall at around 22:00 UTC and dropped to nearly $5,200. A quick rebound pushed prices to around $6,000, only to then slide further, to as low as $4,755.
However, CoinDesk claims that within the same period, the price of Bitcoin itself largely held at around $7000, showing a 20 percent difference between the prices.
At the time of writing, all rollbacks have been completed and futures trading have resumed but the company still has an uphill task to redeem itself if what was going on in the social media outlets is anything to go by. OKEx has indicated that it’s investigating the matter to determine what exactly happened.
The anomaly shows the price of Bitcoin falling to a 50 day low on Friday morning, dropping below the $7,000 mark. But it steadily recovered to above the mark once again.
Is OKEx right to roll back the liquidation contracts? Leave us your opinion in the comments section.