Hong Kong stock exchange OKEx stated that it will assume part of the losses due to liquidation of long positions on bitcoin at a total of $460 million.
When on site there were such a large position, it resulted in the firing of the risk management system.
“Client c ID 2051247 initiated a request for an unusually large long position (4168515 contracts) on July 31 at 2 a.m. Hong Kong time, which triggered our risk management system”, – said in a statement OKEx.
Site team contacted the trader and asked him to partially close a position in order to reduce the risks for the market. However, the client refused to cooperate, and the market has frozen the account to avoid a further increase in positions.
Shortly thereafter, the rate of BTC fell, which caused the liquidation account. The trader was determined to close the position at 51 975,2 BTC at around $8020,49, however, the market failed to realize it.
In the end, remained unsettled about $420 million
To mitigate the effects of this incident OKEx allocated 2 500 BTC from its own funds to replenish the insurance Fund, which previously accounted for 10 BTC.
In addition, on 4 August, the stock exchange introduced new rules to fight manipulation in the process of margin trading, including a number of restrictions on the size of positions and margin call requirements.