OKEx Causes $24 Million in Trading Losses for Settling Futures Contracts Early Without Any Warning
The Bitcoin Cash (BCH) hard fork has caused some issues for traders at OKEx, a Hong Kong-based exchange that is the second largest one in trade volume now.
The company decided to settle all its Bitcoin Cash contracts early because of the fork in November 14 and this caused aggregate losses for short positions to be of roughly $24 million USD.
Bloomberg has affirmed that a single trader lost over $700,000 USD because he had his hedging position closed too prematurely, so it is fair to say that investors were not happy with the decision.
This move has caused many traders to scale back and to end their relationships with the exchange because they felt disrespected or robbed. One person, according to the reports, has already filed a complaint with the Hong Kong's Securities and Futures Commission.
During a recent interview with the Western media, Andy Cheung, the head of operations at OKEx, has affirmed that the company considered various scenarios and that this was the most fair and rational decision they were able to come up with.
As the market is not highly regulated right now, it is still unlikely that the company wil face any problems, but the loss of trust may be the harshest damage that OKEx will get.