The contribution of OKEx exchange to insurance fund will offer an additional layer of safety to the users and ensures that the interests of users are protected. Cryptocurrency exchange OKEx has donated $4.5 million in Bitcoin to its perpetual swap market insurance fund as a show of support for the Warren Buffett Power Lunch.. More protection for traders. With OKEx, our margin trading insurance can secure your positions from the volatility. To address this, both Bitmex and OKEx implemented an ‘insurance’ fund – with the size of the pool publicly visible. This is where BitMEX’s insurance fund comes in. More protection for traders . The fund is replenished with the initial margin that liquidated traders have at the outset of their trade. Considering that there will still be a discrepancy, it remains to be seen how the situation will unfold in the coming weeks. While this guide introduces the various fee types and their application to user tiers, you can contact our Support Center for any further queries. Cryptocurrency exchange OKEx has donated $4.5 million in Bitcoin (BTC) to its perpetual swap market insurance fund as a show of support for the Warren Buffett Power Lunch. After getting verified by the trade market, OKEx exchange is delighted to notice that it’s crypto developed products have turned out to be the most reliable products of retailers and customers throughout the world. In 2019, Okex’s insurance fund grew more than 1000 % from 156 to 2000 BTC. This meant OKEx had to settle the trade for $389 million – leaving a $29 million, or BTC 3877, shortfall in cash. Unfortunately, TheSwapMan claims the OKEx insurance fund doesn’t have nearly enough coverage for this issue. Investments Global Okex Fund - globalokexfund.com - full information - analysis, paying or not paiyng, deposits, insurance, monitoring, opinions, reviews The portal helps visitors to track and analyze offers in the investment market. Maintaining the insurance fund at the same value. In OKEx’s own words, their policy is described as: “When the insurance fund cannot cover the total margin call losses, a full account clawback occurs. In some rare cases, insurance fund might not be sufficient to cover losses on unfilled liquidation orders. Cryptocurrency exchange OKEx has donated $4.5 million in Bitcoin (BTC) to its perpetual swap market insurance fund as a show of support for the Warren Buffett Power Lunch.. More protection for traders. Major cryptocurrency exchange OKEx has donated $4.5 million in Bitcoin to its perpetual swap market insurance fund in a show of support. If this happens, okex.com will automatically take needed funds from all traders who were profitable during the week before settlement. Finance Magnates is a global B2B provider of multi-asset trading news, research and events The Conundrum of Avoiding Clawbacks So we know that the clawback mechanism is the bottom-line and ultimately unfavorable to traders – especially for those who are running an arb-type strategy. More protection for traders In a press release shared However, there is a chance, of course, that those limit order will never be filled. What is okex insurance fund? This helps to avoid aggressive selling or buying in case of multiple liquidations. As a result, OKEx froze the trader’s account, preventing him/her from taking any more positions. Both the partial liquidation fee and the liquidation fee can also not exceed 12.5% of the option contract's premium. Luckily for OKEx traders, the exchange confirmed that it had injected an extra BTC 2500 into the insurance fund before settlement time this Friday. OKex … Do let us know and we'd be happy to check ourselves and fix if necessary. Today I am thrilled to announce that Block Dream Fund, an investment institution under OKEx, has invested in Plasm Network and is joining the Plasm Network ecosystem. Cryptocurrency exchange OKEx has donated $4.5 million in Bitcoin to its perpetual swap market insurance fund as a show of support for the Warren Buffett Power Lunch. In a press release shared with Cointelegraph on July 23, the Malta-based crypto exchange revealed its contribution to the perpetual swap market insurance, whose amount is equivalent to what … Enter your email address below. The idea of the insurance fund is to pay the amount of a default value on a margin call before a clawback event is triggered. This drop in value led OKEx to liquidate the account. Up until Friday, this fund contained BTC 10 – not quite enough to fill a gap of BTC 3877. For more information, read our Luckily for OKEx traders, the exchange confirmed that it had injected an extra BTC 2500 into the insurance fund before settlement time this Friday. As of Dec. 24, the OKEx Insurance Fund is worth nearly $46.3 million, much lower than the $100 million increase seen by the BitMEX fund in 2019. For this reason, okex.com liquidates positions not against the order book with a market order, but with limit orders. With OKEx, our insurance fund can secure your positions from the volatility. OKEx operates a clawback scheme. But have no fear, the OKex insurance fund is backing the system as a safeguard, right? The sources of the fund are mainly from OKEx and the premiums after forced liquidations. Cryptocurrency exchange OKEx has donated $4.5 million in Bitcoin (BTC) to its perpetual swap market insurance fund as a show of support for the Warren Buffett Power Lunch. One substantial liquidation against the order book may cause a cascade which will hammer down the market or make it soar, significantly deviating from the index price. So the bigger the insurance fund, the less likely the clawback is to occur. The exponential increase in the size of its fund corresponded with growth in trading volumes. Binance, which has faced a turbulent 2019, is being questioned again, this time for the rapid growth of its insurance fund, with allegations made this is being done at the expense of its customers. Insurance fund is set up to cover the societal loss generated or to settle incidents in futures trading. OKEx Injects BTC 2500 into Insurance Fund to Cover $29 Million Losing Trade The exchange injected the funds from its own capital pool in order … OKEx operates a margin trading insurance fund to protect users from auto-deleverage liquidations. If the margin required to hold open positions reaches 1%, okex automatically submits limit orders to close positions at the price where leftover margin will still be 1%. There is The OKEX insurance fund is run in order to be a backstop for all those trades that cannot be liquidated above the bankruptcy price. This penalty fee, when charged, is injected into the OKEx insurance fund at the time of settlement. Cryptocurrency exchange OKEx has donated $4.5 million in Bitcoin to its perpetual swap market insurance fund as a show of support for the Warren Buffett Power Lunch.. More protection for traders For comparison - Bitmex, another marketplace for Bitcoin futures, currently has an insurance fund of 11,547 BTC. When you get liquidated at okex.com, whatever the margin is left afterwards is not returned to you, but attributed to the insurance fund (that 1% mentioned earlier). When you get liquidated at okex.com, whatever the margin is left afterwards is not returned to you, but attributed to the insurance fund (that 1% mentioned earlier). We will send instructions to reset Anyone reading this article will likely already be a fan of trading cryptoassets, and therefore will know that it is risky. As reported by Finance Magnates earlier this week, a trader on the Hong Kong-based exchange initiated a huge order, worth approximately $460 million, in long USD/BTC futures contracts. Just last year, for example, OKEx found itself in the hole for $420 million as a direct result in the price fluctuation of crypto assets across the board. In the last quarter, the fund has taken a significant loss on one occasion with net outflows of 310 BTC, after volatile trading in BTC futures. Up until Friday, this fund contained BTC 10 – not quite enough to fill a gap of BTC 3877. Apart from normal token trading, OKEx offers a host of derivative products like futures trading. “The insurance fund minimizes the uncertainty and trading risk of which traders’ expected profit would be taken out, aka clawback risk,” OKEx explains. Edit August 9: The situation ended up getting resolved with a 17% clawback that was reduced thanks to a 2,500 BTC injection into fund by OKex. “The insurance fund minimizes the uncertainty and trading risk of which traders’ expected profit would be taken out, aka claw back risk,” OKEx press statement explains. The insurance fund (consisting of the maintenance margin salvaged from liquidated traders) has a whopping 10 BTC, which is not quite enough to cover the tab. Since traders can open much more significant positions then the collateral they provide, at times, there might be not enough liquidity to close a massive position. In essence, all profitable traders on OKEx and Bitmex are paying an ‘implied’ insurance premium for underwriting the systemic risk of the platform. Not great obviously – who likes have any of their money taken? The remaining amount OKEx had to settle was 950 BTC and after subtracting the 10 BTC in its insurance fund, 940 BTC was still left for the exchange to cover. If, after settlement/delivery of contracts on each Friday, there remain some unfilled liquidation orders, the loss on them will be covered from this insurance fund. More protection for traders. The donation is expected to go through on 24 July, which will roughly double the amount of the perpetual swap market insurance fund. OKEx has donated $4.5m — approximately €4m+ — of bitcoin to its perpetual swap market insurance fund in order to foster the confidence of customers in trading This penalty fee, when charged, is injected into the OKEx insurance fund at the time of settlement. At settlement time, Friday at 16:00 HKT, bitcoin was valued at BTC 1 to $7480. Just like the two exchanges above, Digitex Futures has confirmed that it will intervene and liquidate positions through … OKEx has donated $4.5m — approximately €4m+ — of bitcoin to its perpetual swap market insurance fund in order to foster the confidence of customers in trading cryptocurrencies, according to a press release the company published. Still, the inherent volatility of the cryptocurrency space can change things quickly. Cryptocurrency exchange OKEx has donated $4.5 million in Bitcoin to its perpetual swap market insurance fund as a show of support for the Warren Buffett Power Lunch.. More cushioning for traders. The Malta-based crypto exchange, OKEx just donated about $4.5 million in BTC to its insurance fund as compensation for skipping the Warren Buffett Power Lunch. Cryptocurrency exchange OKEx has donated $4.5 million in Bitcoin to its perpetual swap market insurance fund as a show of support for the Warren Buffett Power Lunch. This mechanism is called clawback. The OKEX insurance fund is run in order to be a backstop for all those trades that cannot be liquidated above the bankruptcy price. Cryptocurrency exchange OKEx has donated $4.5 million in Bitcoin to its perpetual swap market insurance fund as a show of support for the Warren Buffett Power Lunch. Only those who were profitable across all three contracts maturity periods (weekly, bi-weekly, quarterly) will be subjected to a clawback. Major cryptocurrency exchange OKEx has donated $4.5 million in Bitcoin to its perpetual swap market insurance fund in a show of support. Join the iFX EXPO Asia and discover your gateway to the Asian Markets. Communication Security. Presuming this was in addition to the existing BTC 10, that still left traders with a shortfall of BTC 1367. HotForex Starts the Road to Paris Trading ContestGo to article >>. OKEx offers tiered margining for registered customers, we can offer lower rates according to the trading volume and customer types. With bitcoin falling in value, OKEx was unable to fill this trade. Balance of insurance fund of Deribit. To avoid what OKEx calls a “societal clawback,” the exchange has already established an ETH/USD options insurance fund of 1,000 ETH, worth about $240,000 as … After getting verified by the trade market, OKEx exchange is delighted to notice that it’s crypto developed products have turned out to be the most reliable products of retailers and customers throughout the world. As noted in our last piece on OKEx, in situations such as this the exchange has an insurance fund to cover the costs. As well as facing a controversial data breach which saw customer details including names, addresses, signatures and photos of its customers […] As the trader had contracts for BTC 52,000 that meant the liquidated trades had a value of $418 million. They said if OKEx dumped an extra 2,500 BTC from their own capital pool stash into the insurance fund, when the settlement happens at end of day 4pm HKT time on August 3, 2018 – that if any malicious manipulation attempts are found that it will delay the settlement process for 10 minutes and can then manually adjust the price back to a reasonable level before delivery is completed. July 2018 – the exchange forced an investor to liquidate its position on bitcoin after it exceeded the exchange's insurance fund. Leave your name/email (not required) if you'd like to be contacted about this story (will not be disclosed): Be it a typo or a factual error - we do our best but we are also human! BitMEX claims that its notional annual trading volume is around $1 trillion, making the bitcoin hold in this insurance fund a relative drop in the bucket. OKEx operates an options insurance fund and options insurance fund to protect users from auto-deleverage liquidations. Example: suppose that after using the entire insurance fund, there’s still 10 BTC of liquidation losses. In … In a press release shared with Cointelegraph on July 23, the Malta-based crypto exchange revealed its contribution to the perpetual swap market insurance, whose amount is equivalent to what … Wrong. During the clawback of last year, OKEx had just 10 BTC in its insurance fund and had to inject some 2,500 BTC from its reserves while clawing back the rest (some $9 million) from its traders in an unpopular move that kept the exchange afloat after a $416 million Bitcoin trade went sideways. Luckily for OKEx traders, the exchange confirmed that it had injected an extra BTC 2500 into the insurance fund before settlement time this Friday. Thank you for registering to Finance Magnates. One potential problem is that the OKEx insurance fund will only cover a portion of the open loss. OKEX has fully encrypted communications which means that when you send them information, it is sent in a secure manner. The clawback is the reason why you cannot withdrawal the realised profit before settlement on each Friday, that would make traders withdraw their funds just before the settlement to avoid possible clawback. OKEx has adopted the societal loss risk management mechanism since launched and it has been working orderly as intended. This Friday, OKEx provided an update to its traders regarding the gigantic unfilled futures contract looming over its exchange. OKEx, a world-leading cryptocurrency exchange, has donated $4.5 million-worth of Bitcoin to its perpetual swap market insurance fund to foster customers’ confidence in trading cryptocurrencies The OKEx insurance fund, meanwhile, covers just 10 BTC. Balance of insurance fund of Binance. The fund is replenished with the initial margin that liquidated traders have at the outset of their trade. As noted in our last piece on OKEx, in situations such as this the exchange has an insurance fund to cover the costs. This means that, due to OKEx’s clawback policy, futures traders on the platform may have to pay around 18% of their profits to cover the shortfall from liquidating the position. 5、Societal Loss & Full Account Clawback System OKEX Futures uses a "full … OKEx Donates $4.5M to Insurance Fund After Skipping Warren Buffett Lunch By Tyler Smith – Cryptocurrency Expert The Malta-based crypto exchange, OKEx just donated about $4.5 million in BTC to its insurance fund as compensation for skipping the Warren Buffett Power Lunch. With available data going back as far as early 2016, BitMEX claims that this fund “grows from liquidations that were able to be executed in the market at a price better than the bankruptcy price of that particular position,” and that it is withdrawn from whenever customers are unable to fully meet the demands of their transactions. CFTC Probes Binance Over Accepting US Derivatives Traders, BitGo Secures Trust Charter License from New York Regulator, Binance Invests in Texas Crypto Fund Multicoin Capital, OKEx Injects BTC 2500 into Insurance Fund to Cover $29 Million Losing Trade. OKEx operates an options insurance fund and EOSUSD options insurance fund to protect users from auto-deleverage liquidations. April 2018 – OKEx launches its own utility token, OKB; May 2018 – CEO Chris Lee leaves to join Huobi Global; May 2018 – the exchange became the world's largest by reported turnover. In the last two weeks, after… We do not store your information and we do not disclose our sources. Please open the email we sent you and click on the link to verify your account. OKEx Insurance Fund. The BitMEX Insurance Fund, however, dwarfs the fund balances of these three other exchanges. Since the $500 million liquidation debacle, OKex has significantly built up its insurance fund to prevent future occurrences. OKEx, the popular bitcoin and crypto exchange company, today announced it has donated $4.5 million worth of bitcoin to its perpetual swap market insurance fund. If, after settlement/delivery of contracts on each Friday, there remain some unfilled liquidation orders, the loss on them will be covered from this insurance fund. OKEx Donates $4.5M to Insurance Fund After Skipping Warren Buffett Lunch. The BitMEX Insurance Fund, however, dwarfs the fund balances of these three other exchanges. More protection for traders In a press release shared with Cointelegraph on July 23, the Malta-based crypto exchange revealed its contribution to the perpetual swap market insurance, […] In this instance, that means OKEx’s profitable traders are going to have to pay a clawback rate of 17 percent. The contribution of OKEx exchange to insurance fund will offer an additional layer of safety to the users and ensures that the interests of users are protected. Wrong. Major cryptocurrency exchange OKEx has donated $4.5 million in Bitcoin to its perpetual swap market insurance fund in a show of support. Cryptocurrency exchange OKEx has donated $4.5 million in Bitcoin to its perpetual swap market insurance fund as a show of support for the Warren Buffett Power Lunch. This funds however are to be placed in OKEx perpetual swap market insurance fund to protect traders from claw back risk. High leverage, however, comes with a cost. Please check your inbox for our authentication email. Here’s what that means: “As a result, if the price stays at this level, the profitable traders since last Friday until this Friday will have their gains dented by 940 BTC (950 loss minus the 10 BTC of insurance coverage), as per their socialized loss clawback system….This is catastrophic.” Yet, instead of covering it with company funds, OKEx decided to Cryptocurrency exchange OKEx has donated $4.5 million in Bitcoin (BTC) to its perpetual swap market insurance fund as a show of support for the Warren Buffett Power Lunch. Up until Friday, this fund contained BTC 10 – not quite enough to fill a gap of BTC 3877. With OKEx, our margin trading insurance can secure your positions from the volatility. Cryptocurrency exchange OKEx has donated $4.5 million in Bitcoin (BTC) to its perpetual swap market insurance fund as a show of support for the Warren Buffett Power Lunch. Okex.com solves this problem with the insurance fund and, if necessary, with a clawback. Last year, OKEx introduced perpetual swap trading along with the new risk management system which their customers widely benefited from. These two mechanisms are, basically, a socialised losses systems where unfilled liquidation losses are spread across all traders evenly. When the insurance fund cannot cover the total margin call losses, a … The only problem is that the fund only contains 10 BTC ($75,700) – leaving another 940 BTC for OKEx’s traders to make up. As of Dec. 24, the OKEx Insurance Fund is worth nearly $46.3 million, much lower … In such case, those contracts declared bankrupt, and the loss on them will be paid from insurance fund and through a clawback. By Tyler Smith – Cryptocurrency Expert. OKEx Insurance Fund. Chart 3 - Daily net change of OKex’s insurance fund. OKEx is a Seychelles-based cryptocurrency exchange that provides a platform for trading various cryptocurrencies. In order to prevent socialized losses, we have decided to support the insurance fund and strengthen it by injecting 500 BTC of company funds.” Binance has also taken steps to pump up its insurance — which fell 51% percent from $12.8 million USDT to 8.2 million in one day. In 2019, Okex’s insurance fund grew more than 1000 % from 156 to 2000 BTC. If a lot of market participants are highly leveraged holding significantly large positions, it may be difficult to liquidate them in case their margin decreases to liquidation levels. This Friday, OKEx provided an update to its traders regarding the gigantic unfilled futures contract looming over its exchange. OKEx operates a futures insurance fund to protect users from auto-deleverage liquidations. Having high leverage comes with a cost. At that point in time, the value of bitcoin was BTC 1 to $8040. But have no fear, the OKex insurance fund is backing the system as a safeguard, right? It is noteworthy that once the insurance fund is used up and a default occurs, the part of user’s profit that should have been covered by the insurance fund will be shifted to all profitable traders of the exchange. While OKEx has experience of an insurance fund unable to cover its losses and BitMEX has a behemoth fund that builds up and up ad infinitum, another exchange shortly to enter the market is proposing a different system. With OKEx futures, our futures insurance can secure your positions from the volatility. The insurance fund (consisting of the maintenance margin salvaged from liquidated traders) has a whopping 10 BTC, which is not quite enough to cover the tab. The exponential increase in the size of its fund corresponded with growth in trading volumes. A significant advantage of the bitcoin futures platforms is a bigger leverage than in the spot markets like Bitfinex or Kraken for example. OKEx does have an insurance fund that is supposed to cover losses such as the above. 4.8 OKEx will take 15% of daily distributable interest as the platform's income（Currently, this income is totally injected to the insurance fund for margin trading, which is … Some of exchange's core features include spot and … According to a statement released by OKEx this Friday, the exchange attempted to contact the trader and get him/her to close some positions. Both the partial liquidation fee and the liquidation fee can also not exceed 12.5% of the option contract's premium. Thank you. With OKEx, our insurance fund can secure your positions from the volatility. For scenarios like this, futures marketplaces have an insurance fund - the OKEx insurance fund at the time , however, only covered 10 BTC, which proved to be far too small. with special focus on electronic trading, banking, and investing.Copyright © 2021 "Finance Magnates Ltd." All rights reserved. For example, if you made 1 BTC profit at weekly, 1 BTC at bi-weekly, and lost 3 BTC at quarterly, your net loss is 1 BTC, so your account will not be a subject to a clawback. More protection for traders In a press release shared with Cointelegraph on July 23, the Malta-based crypto exchange revealed its contribution to the perpetual swap market insurance, […] Ten bitcoins is 0.1% of ten thousand bitcoins (10/10,000 = 0.1%), and this is your clawback rate. Terms, Cookies and Privacy Notice. The OKEx insurance fund, meanwhile, covers just 10 BTC. The total profit made by traders who were profitable throughout the week is 10,000 BTC. If you’re not yet familiar with margin trading, check out this article for starters: Basics of margin trading bitcoin futures. your password. The exchange stated that the trader refused to cooperate with them. More protection for traders . This social loss is a massive amount of money: 950 BTC. How will this be covered, you ask?
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