OKEX Denies Guilty in the BCH Futures Issue: Customers’ Lousy Management Led to Losses
TL;DR
- Due to BCH hard fork and following hash wars, numerous investors experienced significant losses, with a lot of them blaming cryptocurrency exchange OKEX for it.
- The exchange was accused of an attempt at market manipulation by ending BCH futures contracts trading early and suddenly, while the prices were damaging to investors.
- OKEX denied these allegations, explaining its acts and methods, and claiming that it acted the way it did to protect the market and customers’ interests. Furthermore, OKEX considers legal actions for hurting its reputation.
Recent events regarding the Bitcoin ecosystem has brought a lot of changes that affected the entire crypto space. Numerous coins lost a lot of their value, and the community is looking for someone to blame.
On November 14th, just one day before the BCH hard fork, OKEX announced that BCH futures would stop trading “at 9:05 am and be delivered at 10:00 am Nov 14, 2018, CET (UTC +1)” because of an upcoming hard fork. However, during the same day, they also announced the decision to use the last traded prices as delivery prices, since it was not possible to compose an index for delivery.
The exchange was directly accused of making market manipulations by an entity known as AMBER AI, a global electronic trading firm.
Several media outlets reported on this and similar accusations against OKEX, stating that the exchange is blamed for causing losses via settling the BCH futures contracts without prior warning. The decision to do so apparently negatively affected multiple investors, since the contracts were closed at a level that did not reflect proper market prices.
OKEX Response: Amber is HK based while OKEX is banned in HK
When asked by CryptoPotato editor, OKEX denies any attempt to make market manipulations or purposeful wrongdoing. Instead, OKEX declares that “the exchange has no institutional client profile going by the name of Amber AI, which is supposedly a Hong Kong-based firm.” OKEX also claims that they serve no customers in Hong Kong and this is according to the local laws.
As for the Amber AI account mentioned in the Medium post, this is classified as an individual account belonging to a person that is not a resident of Hong-Kong.
In regards to allegations of the early settlement of BCH futures contracts, OKEX stated that “the decision to do so was implemented due to market integrity and concern regarding customer interests.” Furthermore, they quoted the clause 2.5 of their Futures Trading User Agreement, which states that the exchange may postpone or early settlement and delivery of futures contracts in case of market anomalies occurring prior or after settlement and delivery.
Considering the likely effects that BCH hard fork was expected to have on the market, OKEX decided to deliver all BCH futures contracts in advance, solely to protect the customers and the markets. As for the settlement price, it is usually constructed based on the spot index, which was impossible to create due to the fact that other BCH index constituents (Coinbase and Binance in addition to OKEX itself) already paused trading. Under these circumstances, the exchange made a decision which they believed to be the best option.
OKEX considers legal actions against Amber AI
Therefore, all allegations of manipulating the market made by Amber AI are classified as false by OKEX itself, and the exchange will continue to view them as such due to the absence of any evidence that would prove otherwise. However, because such accusations are false, and have damaged the exchange’s reputation, OKEX reserves the right to take legal actions against Amber AI for interfering in their business.
OKEX concluded the response by claiming that Amber AI experienced losses due to their lousy management plan, which is not the exchange’s fault. They argue that the majority of their users supported the decision regarding the BCH futures contracts.
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