OKEx, one of the most popular cryptocurrency exchanges in the world, canceled its clients' orders without warning as asset values plummeted. Because of these actions, site users lost their funds.
The investment in question is Bitcoin Cash futures, with a total value of $135 million. Representatives of the exchanger made this decision in order to avoid disruptions caused by the division of the Bitcoin Cash network into two parts.
A futures contract is a financial derivative. Under the terms of such a contract, its holder undertakes to buy or sell a certain amount of a certain asset at a fixed price within a strictly specified period. In the case of Bitcoin futures, the asset is Bitcoin. Few financial institutions offer such services, and the barrier to entry into the market is quite high. For example, CME exchange has set the minimum contract amount to 5 BTC.
The Hong Kong exchange OKEx offers trading in Bitcoin and Bitcoin Cash futures. As previously reported, the Bitcoin Cash network has split into two different cryptocurrencies - Bitcoin Cash ABC and Bitcoin Cash Satoshi Vision - both of which are supported by powerful groups that are unwilling to work with each other.
As a result of the fork, the value of the cryptocurrency dropped significantly (and also pulled down the price of other coins). Thus, OKEx's decision to honor the contracts before they expired resulted in losses for investors. According to Bloomberg, fund manager Qiao Changhe lost $700,000.
Representatives of the exchange explained:
Due to the upcoming fork, there is strong volatility in the trading markets and BCH futures markets. We expect volatility to increase. The outcome of the BCH fork is unpredictable.
They also explained why they did not warn their investors in advance:
A warning would have provoked market manipulation and would have caused losses for our clients. Therefore, we decided to publish a short notice to preserve the stability and fairness of the market
This is not the first time that the OKEx exchanger leaves its customers furious. In March 2018, the company was accused of increasing trading volumes on its exchange. The trader who accused the company provided quite convincing evidence, but the company denied all accusations.
According to financemagnates.com
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On December 12, 2018, the Intercontinental Exchange (ICE) will begin trading Bitcoin futures contracts. It is noteworthy that contracts can be concluded through the platform’s digital asset storage, and clearing will be carried out by ICE Clear US, Inc. All quotas will be in US dollars, and the amount that will be blocked on the account when concluding a futures contract will be 10 bitcoin.
