On the afternoon of March 30th, traders at the OKEx exchange experienced a moment of distress as they witnessed an atypical situation regarding Bitcoin’s future market prices: While the price of bitcoin remained on a bearish trend around $7000 worldwide, traders saw their currency drop to lows below $4800.
The situation was so extreme that, as can be seen in the graph below, bitcoin dropped by almost 1% every second, from over 6500 to 4755 in less than half an hour (while in the rest of the world the price of bitcoin was still fluctuating “stable” around 7000).
Evidently, this situation caused a panic and confusion among investors and traders who, upon seeing their currency plummet for no reason, proceeded in a nervous but understandable manner to liquidate all their contracts. The began eliminating purchase orders and generating massive liquidations as a result of a fall that nobody could explain.
The situation even went so far that one trader – who allegedly lost 11 million Yuan (about $1.75 million), went to OkEx offices in Hong Kong with a bottle of poison and threatened to commit suicide right there in front of everyone:
“I want to see Xu Mingxing, and Xu Xuxing is coming!” shouted the desperate man who claimed to have lost everything, to the point that his wife had asked him for a divorce after the unfortunate incident “I have two bottles of dichlorvos, take one you and one me!”
Faced with this situation of collective nervousness, and in response to the countless complaints received by users, the OkEx team investigated the situation and discovered a clear price manipulation, so they decided to roll-back to the data of Futures operations to the point prior to the beginning of the tampering.
“At 5:00-6:30 on Mar 30, 2018 (Hong Kong Time), a number of users performed unusual transactions to manipulate the price of BTC quarterly futures contract, making it deviate greatly from the BTC index. Based on our team’s investigation, the user closed a huge amount of positions at market price without considering the cost, causing it to drop to an unusually low level
To protect the interests of all OKEx users, We have decided to rollback all the futures transactions (weekly, bi-weekly & quarterly) to 5:00 Mar 30, 2018 (Hong Kong Time)”
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They took the opportunity to sincerely apologize to their users while committing themselves to resolving the situation as quickly as possible. A few hours later the problem would have been solved and the operations would be back to normal.