As AZCoin News reported, one of BitMEX’s latest products, the XRP/USD Perpetual Quanto Swap Contract, lost more than half its value at a glance, XRP price dropping from $ 0.32 to $ 0.14 in a five-minute candle. This Flash crash has liquidated countless traders. However, it seems that BitMEX will not compensate everyone for these losses.
WTF. FUCK YOU BITMEX. This is really not okay! My stop didn´t trigger and my entire bitmex account is fucking gone. Fuck you! pic.twitter.com/WHXbJoiTvL
— Marc de Koning (@Koning_Marc) February 13, 2020
The whole account was wiped out when XRP price fell
When trading derivative instruments, such as XRP / USD perpetual quantum swaps, you are trading on leverage. This means that your income will be multiplied if the transaction works in your favor. On the other hand, you can lose all your holds quickly if the transaction goes against you.
Before the XRP/USD flash crash on Bitmex, the price of XRP has been rising undeniably. As of Thursday, its annual profit is more than 70%. The whole account was liquidated when the stop failed to perform. Many traders have lost everything they have on Bitmex.
In response to users, BitMEX responded as follows:
We understand traders’ frustration when prices move quickly against their positions. However, we’ve investigated recent activity on our XRPUSD perp and our system performed as expected, and prevented liquidations (more details in thread).
— BitMEX (@BitMEXdotcom) February 14, 2020
According to BitMEX, they used the Fair Price Marking method meant users (including some who may believe they were liquidated) avoided liquidation (no liquidations occurred on XRPUSD 14: 00-14: 02 UTC). Stop Market orders set by users to trigger on the Last Price would have triggered due to this move, as designed.
Still, the last Price-triggered stops are vulnerable to fast market moves. A stop Market executes the whole order at the best available price. Stop Limits limit execution price, but may not fill the entire order; Fair or Index Price triggers aren’t directly affected by the Last Price.
Later, the BitMEX stated that the market could guarantee protection against sharp movements for all users under all circumstances. They pioneered the Fair Price Marking system and designed it to protect users from liquidation in this scenario. For stops, users may select which trigger to use at their discretion.
Even so, BitMEX’s Insurance Fund is not intended for use here. The Fund is only used to guarantee profits by preventing the triggering of ADL (Automatic Deleveraging) in the event of unfilled liquidations. If a user loses more margin than allocated to the position, and another user is owed those profits, the delta comes from the Insurance Fund. The Insurance Fund does not protect users from slippage on a market order.
As always, if users have any specific questions, our support team is available to assist at https://t.co/3XByF1PsC4
— BitMEX (@BitMEXdotcom) February 14, 2020
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