OKEx, a Hong Kong-based exchange that is currently the second largest by volume, settled Bitcoin Cash contracts early without warning on November 14. This unorthodox move caused the aggregate losses for short-positions of roughly $24 million. According to Bloomberg, one trader lost $700,000 because his hedging position was closed prematurely. The move supposedly made some traders scale back or end their relationships with OKEx while at least one filed a complaint with Hong Kong’s Securities and Futures Commission. Andy Cheung, head of operations at OKEx, told Bloomberg: “After considering various scenarios, we decided that an early settlement was the most fair and rational decision to maintain an orderly market”. In a largely unregulated market, OKEx will lose clients but it will likely not face any legal consequences.
(Source: Bloomberg, AMBER AI)