In an email to CoinGape team, OKEx team clarified their stand on recent early settlement of BCH futures contracts that led to a media outrage with traders reporting loss of in total of $24 million.
- Second-largest crypto exchange as per Coinmarketcap, OKEx claims market manipulation to be “completely false allegations and the defamatory statements”
- As for BCH futures contract “early delivery was the best option available”
“Majority of our users supports our decision of early delivery of BCH futures contracts”
A recent article published by Amber AI, “a global, diversified electronic trading and technology firm,” on Medium pertaining to futures manipulation on OKEx amidst the Bitcoin Cash (BCH) hard fork drama declared:
“Over the past week, we have seen behavior indicative of market manipulation by OKEx, and estimate $400mm+ of futures contracts have been forced into liquidation as a result.”
It further states, “Instead of allowing the market to free-float, or continuing to enforce the limit-down rule, OKEx announces that they will settle the BCH futures contracts early against the last traded price at 09:05 AM Nov 14, 2018 CET (UTC +1).”
SPECIAL ANNOUNCEMENT: All Bitcoin Cash (BCH) futures contracts will stop trading at 9:05am and be delivered at 10:00am Nov 14, 2018 CET (UTC +1) due to the upcoming hard fork. We will provide a detailed explanation shortly.#OKExAnnouncementhttps://t.co/yh3p46tirc pic.twitter.com/oqioSUOUsf
— OKEx (@OKEx) November 14, 2018
Now, in response the second largest crypto exchange as per Coinmarketcap, OKEx has released a formal explanation, “These are completely false allegations and the defamatory statements have caused serious damages to OKEx’s reputation,” and that “early delivery was the best option available.”
To start with, they clarified about Amber AI,
“We do not have an institutional client profile named Amber AI, while Amber AI claims themselves as a Hong Kong-based company. We do NOT serve any customer in Hong Kong, in respect of the local laws and regulations. The OKEx account Amber AI claimed managing is an individual account, which is not a Hong Kong resident or entity on the report of the KYC information.”
Moving on to the core of the problem, the early settlement of BCH Futures Contracts has been based on the customer interests and market integrity due to the force majeure of BCH Hard Fork and its large-scale impact on the futures market. It further followed the clause 2.5 of OKEx Futures Trading User Agreement,
“If market anomalies occur before or after settlement and delivery, which results in wide fluctuation of futures index or abnormal clawback rate, we may postpone or early settlement and delivery as the case may be. We shall post an announcement regarding detailed rules.”
As for the settlement price of futures contracts on OKEx, it is based on spot index. BCH index constituents, in particular, spot price of Coinbase, Binance, and OKEx as per the official statement that has already paused trading making it “impossible to create a BCH index price for settlement.”
“We reaffirm that we will NEVER trade against our customers and manipulate the market,” comes the closing statement of OKEx, before adding, “In fact, the majority of our users supports our decision of early delivery of BCH futures contracts.”
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I am an entrepreneur and a writer with a bachelors degree in Computer Science. I manage the blockchain technology and crypto coverages at Coingape. follow me on Twitter at @arya_achal or reach out to me at achal[at]coingape.com.