OKx to Compensate Users Affected by Flash Crash

Okx suffered a flash crash of its native token, OKB, on Tuesday, January 23rd.

The event caused the price of the OKB token to dip over 50% in value. OKB moved from an impressive price of $50.69 to a shocking low of $25.10. Let’s explore more about this terrible news.

OKx Offers Compensation to Customers Impacted by Sudden Market Plunge

This huge price decline triggered a rush of automatic liquidations of margined positions. And caused the platform to experience a brief moment of extreme volatility. Okx has brought the situation under control and is working hard to create a compensation scheme for the impacted users.

Explaining the crisis, the exchange wrote on X: “Due to the downward trend of the overall market on January 23, OKB prices fluctuated simultaneously. After the currency price hit 48.36 $USDT at 17:07:26 (HKT), it triggered the liquidation of multiple large leverage positions. Coupled with the impact of market conditions, the currency price fell, which further triggered the liquidation of pledged loans, leverage transactions, and cross-currency transactions, ultimately causing the price to drop to 25.1 $USDT in a short period of time. The currency price has now returned to normal.”

OKX said it will “fully compensate users for additional losses caused by abnormal liquidation, including pledge lending/margin trading/cross-currency transactions.” The crypto exchange plans to unveil detailed plans in the following 78 hours. 

As part of its plans to stop such incidents in the future, Okx is also looking into improved risk management procedures and liquidation processes. The trading platform pledged to improve different parts of its services, including spot leverage levels, pledged lending risk control guidelines, and liquidation procedures. 

Despite the recent setback, OKx has made huge strides in complying with regulatory policies. The crypto exchange recently unveiled new requirements for its UK users to ensure their compliance with local rules.

As of this writing, OKB trades at $48.49. 


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