Cryptocurrency exchanges play a big role in people’s lives. These service providers can effectively make or break someone’s personal life. It seems evident OKEx may have some explaining to do in this regard. One of their customers claims the company liquidated his large Bitcoin stash in an illegal manner.
The OKEx Story in Brief
A lot of factors regarding this OKEx incident are still unknown. More specifically, sources claim someone attempted to take matters into their own hands at the company’s offices. The reason for this behavior is the alleged liquidation of millions of dollars in Bitcoin. More specifically, the liquidation allegedly occurred illegally. It is a very troublesome development which also highlights a few key risks.
#okex illegally liquidated this Chinese person $10,00,000 worth of #Bitcoin $BTC. He was trying to commit suicide right in front of the okex office. https://t.co/wFu3ULBaq0
— Coin Panda (@8bitandstuff) March 29, 2018
Relying on centralized trading platforms will always be a big problem. These companies effectively control user funds at all times. Trusting companies with thousands of dollars is a mental hurdle for a lot of people. Doing so with millions is a very different idea altogether. There is no reason any third-party should ever access millions of dollars of your personal funds and remain in control over it at all times.
Additionally, responsible investing is something people tend to lose track of as well. The cryptocurrency greed is setting in on a regular basis. Especially with the prices skyrocketing last year, a lot of people threw life savings into Bitcoin and outcomes. Right now, their portfolio has dropped by 50% in value or more. Cryptocurrency is not a get-rich-quick scheme by any standards.
The Volatility is not Over
Unfortunately, it seems things will get worse for cryptocurrency holders. As of right now, there is so much volatility in the market, the prices will likely continue to drop. Someone is clearly pushing the value of Bitcoin down on purpose. Despite solid technical developments on the horizon, it seems the world’s leading cryptocurrency keeps taking a beating.
The “illegality“ here was due to OKEx futures price crashing 30%-40% more than every other margin exchange, when spot price merely went down by 5%. This greatly reduced “leeway” and made liquidation inevitable.
— Coin Panda (@8bitandstuff) March 30, 2018
Some people speculate how OKEx may play a big role in this regard. Their futures market is certainly crashing a lot harder compared to the rest of the exchanges. This is quite odd, as their spot price doesn’t suffer the same fate. It appears a lot of trader son that platform may get liquidated due to this “strange” activity. Whether or not something malicious is going on, remains to be determined.
All of this further confirms people need to think wisely before buying Bitcoin. It is a long-term hold when buying the cryptocurrency itself. Investing in futures contracts may seem more convenient, but it also has clear drawbacks. Financial gains and losses are very much a part of cryptocurrency as a whole. With futures being liquidated, the money is gone forever. Buying the currency outright and storing it in a proper wallet will leave the end user in control at all times.
NewsBTC reached out to OKEx for comment but did not receive any response at the time of publishing.
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