Allegations of market manipulations by cryptocurrency exchanges are piling up with users of one of the largest crypto exchange in the world - OKEx - accusing the provider of the same. However, in a recent public statement, OKEx denied all accusations made against it and further justified its controversial moves.
“Rumors have been flying on the internet about OKEx intentionally triggering forced liquidations of accounts by manipulating the prices,” the Hong Kong-based exchange wrote.
It particularly pointed out that it has no interest in market manipulation as it does not make any profits from the price Volatility , but rather from the executed trades.
“...the rollback on Mar 30 was executed because we have the obligation to protect all the affected customers. OKEx provides a platform to allow customers to trade in our order books, but we are not directly involved in the trades. Moreover, all the transaction details are public. We, as a Trading Platform , do not make profit from the price volatility, but generate income from trading fees. We have not reason to, and have never and will not, manipulate the prices of any of our market,” it detailed.
The controversy
The controversy initiated on 30th March as the exchange saw a massive drop in BTC prices, which slumped below $4,800, while the overall market value remained steady around $7,000. The exchange even encountered a steep drop from $6,500 to $4,755 in mere 30 minutes - a drop of almost one percent per second.
This created a panic among the clients and the exchange was flooded with complaints. In order to restore the situation, OKEx rolled back the futures contract as some people reportedly aggravated the price of BTC quarterly futures.
In a statement, OKEx quoted its futures trading user agreement: “6.2 OKEx reserves the right to enact control over accounts if malicious price manipulation or any other pernicious wrongdoing occurs. If required, OKEx reserves the right to close accounts, limit trading, halt trading, cancel transactions, and rollback transactions to eliminate any adverse effects in the futures market.”
It announced that to protect its clients’ interests, the exchange will roll-backed all future transactions to 05:00 March 30th, 2018 (Hong Kong time).
In a detailed note, the exchange stated: “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 31st, 2018 (Hong Kong Time). Further announcement will be made if there are any changes in delivery time.”
OKEx further waived all transaction fees for future trading for a week due to the inconvenience caused to its users.
Though many welcomed the exchange's move, it also faced a massive backlash from the cryptocurrency community.
However, despite all negative press, OKEx's position in the market is hardly hampered, as it is still ranking as the fourth largest exchange with nearly $800 million in daily trading volume.
