Crypto Price Crashes 50%, Exchange Will Compensate Victims

Crypto exchange OKX experienced a rapid drop in the price of its own token on Tuesday, also known as a flash crash. The price of the token OKB (OKB) suddenly fell so hard that it plummeted from $50.69 to $25.10, a drop of about 50%. OKX has now responded in a statement.

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Cause of crypto flash crash

After crypto exchange OKX experienced a flash crash of its own token OKB, the price of the token has almost recovered. Currently, the trading price is around $47, whereas last Tuesday it was different. If you own the token, you will enjoy benefits such as discounts and exclusive access to OKX.

OKX gave in Explanation suggested that high volatility was the cause. The price of OKB fell from $50.69 to $48.36, leading to the unwinding of several margin positions. As a result, there was high volatility for three minutes and OKB hit a low of $25.10.

Flash crashes are more common

So-called flash crashes are not entirely new in the Netherlands Crypto world and beyond. The cause is often incorrect customer orders that were entered manually. For example, a Citigroup trader made a mistake last year by adding a trade with an extra zero. This lead estimated to a crash of 325 billion euros on the various stock markets in Europe.

Bitcoin (BTC) also experienced a number of flash crashes. So the price fell last suddenly 10%, which surprised the crypto world. Some said it was an analyst report published at the time, while others said the market was simply overheated.

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Users will be compensated

OKX announced that it is working on compensating users. In the statement they said the following:

“We understand that this situation is unusual and apologize to the affected users. Compensation will be provided to users who suffered losses due to unusual liquidations, including users of flexible lending, margin trading and multi-currency trading products. A detailed compensation plan will be published within 72 hours.”

In any case, OKX will carry out additional controls and investigate liquidation mechanisms to prevent future cases.


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