OKX Announces Compensation for Users Amid 50% Downtime Incident

OKX, a cryptocurrency exchange, signaled a rapid market downturn this week, witnessing a nearly 50% plunge in prices within a short period. The exchange promptly addressed the issue, communicating its commitment to resolving the situation through an internal plan, as announced to its 393,100 followers on X (formerly Twitter).

OKX assures users of full compensation for additional losses resulting from abnormal liquidation and pledges to disclose the specific compensation plan within 72 hours. At the time of this update, the OKB price is $48.07, reflecting a 14.35% decrease over the past 7 days.

On January 23, OKB experienced a significant and swift decline, dropping from $52 to $25, approximately 50%, causing notable stress on users’ investments. In response, OKX outlines plans to implement measures to prevent sudden market swings, optimizing spot leverage gradient levels, pledged lending risk control rules, and liquidation mechanisms to mitigate similar issues in the future.

Despite these assurances, skepticism among X users lingers, with doubts raised about OKB’s $10 billion market capitalization and concerns about a $10 million sale triggering a 50% drop in OKB’s price.

Today, OKB experienced unexpected volatility. The market has quickly stabilized, and we’re actively developing a compensation plan, set to be finalized within 72 hours.

We apologize for any inconvenience caused and are committed to enhancing our risk management protocols.… pic.twitter.com/GxJ2M0dOS3

— OKX (@okx) January 23, 2024

Amidst the situation, a concerned user emphasized the need for swift resolution, warning of a potential further decline in price if not addressed promptly. Simultaneously, another user speculated that the market turmoil might be attributed to a “whale” liquidating their substantial holdings. In cryptocurrency terms, a “whale” refers to an individual holding an unusually large amount of a specific token, capable of influencing its price significantly through massive sell-offs.

The practice of leveraging involves borrowing funds to amplify potential returns in crypto investments. While it can be highly profitable, it also entails significant risks. At present, OKX offers leverage options of 10x and 20x under full liquidation mode, allowing users to potentially magnify their gains or losses.