OKX to compensate its users after the exchange’s native token crashed, losing half its value.
On Tuesday, January 23rd, 2024, the price of OKB, the native token of the popular cryptocurrency exchange OKX, suddenly crashed over 48% within 15 minutes.
The price plummeted from around $46.80 down to $25.10 before rapidly recovering.
（1/2）由于1月23日市场整体行情下行，#OKB 价格同步波动，币价于 17:07:26（HKT）触及 48.36 $USDT 后，先后触发多个大额杠杆仓位的清算，加之行情影响使得币价下跌，过程中进一步触发了质押借贷、杠杆交易及跨币种交易的清算，最终导致价格在短时间内下跌至 25.1 $USDT ，目前币价已经恢复正常。 pic.twitter.com/Y04BSaCMo6
— OKX中文 (@okxchinese) January 23, 2024
According to a statement released by OKX, the flash crash was triggered by the automatic liquidation of multiple large leveraged positions after OKB had initially dropped from $50.69 to $48.36.
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This cascading liquidation led to further liquidations of collateralized loans, margin trades, and cross-currency transactions on the exchange.
Over $6.5 billion in diluted market capitalization was briefly wiped out before prices rebounded.
OKX attributed the high volatility to the overall downtrend in cryptocurrency markets that day, which also saw Bitcoin shed 3% and Ethereum lose 6% amid a wider selloff.
However, the exchange acknowledged that the scale of the OKB crash was abnormal and necessitated additional risk management controls to prevent recurrences.
（1/2）由于1月23日市场整体行情下行，#OKB 价格同步波动，币价于 17:07:26（HKT）触及 48.36 $USDT 后，先后触发多个大额杠杆仓位的清算，加之行情影响使得币价下跌，过程中进一步触发了质押借贷、杠杆交易及跨币种交易的清算，最终导致价格在短时间内下跌至 25.1 $USDT ，目前币价已经恢复正常。 pic.twitter.com/Y04BSaCMo6
— OKX中文 (@okxchinese) January 23, 2024
In a move considered rare for the volatile crypto industry, OKX pledged to “fully compensate users for additional losses caused by abnormal liquidation.”
The exchange said it is working on formulating a specific reimbursement plan for affected customers using features like flexible loans, margin trading, and multi-currency trading.
The compensation details are expected within 72 hours.
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