OKX exchange to compensate users after 48% token flash crash
Cryptocurrency exchange OKX will compensate users affected by the flash crash on January 23 with its name token (OKB).
Around 9 a.m. Tuesday, OKB's stock fell 48% from $46.80 to $25.10 in less than 15 minutes, wiping out $6.5 billion in net market capitalization before a quick recovery. The token is trading at $45.94 at press time.
“After touching 48.36 USDT, the unwinding of several large utility positions has been triggered in a row,” wrote the OKEX staff. “Furthermore, the impact of the market caused the currency to depreciate, leading to the disappearance of pledged loans, trade transactions and cross-currency transactions, which eventually brought the price down to $25.1 in a short period of time.”
The exchange has promised to fully compensate users for additional losses due to abnormal liquidity, with a special compensation scheme starting in the next 72 hours.
On the same day, cryptocurrency markets experienced significant price volatility, driven in part by Greyscale Bitcoin Trust's (GBTC) sale of Bitcoin (BTC) to meet investor redemption requests at the exchange-traded fund. A single entity, troubled cryptocurrency exchange FTX, sold nearly $1 billion worth of GBTC ETF shares as it began liquidating assets to pay creditors.
Our team is analyzing recent okb price dynamics. We will report back to the community later. pic.twitter.com/UI9uPgQfA5
— Star (@star_okx) January 23, 2024
Crypto exchange OKX has been focusing much of its efforts on regulatory compliance for the past year. On December 29, 2023, the firm announced that it would decommission several privacy coins, including Monero (XMR), Zcash (ZEC), Dash (DASH), and Horizen (ZEN). On January 2, the firm announced additional requirements for UK users to meet new Financial Conduct Authority (FCA) requirements, including mandatory risk assessment questionnaires before they start trading.
Related: OKX doubles down on McLaren deal as F1 continues to attract crypto companies
