OKEx exchange recorded the biggest liquidation on Tuesday – it was withdrawn bitcoin long position for $460 million. At the same time, $420 million remain overhang in the settlement period.
According to the trader's community Whalepool, the sum of 950 BTC was too heavy that the platform failed to sell it at the market price.
"The massive unfilled Long liquidation of $415 Million has an open loss of -950 BTC that will hurt profitable BTCUSD contract traders of all maturities on OKEx Futures," the community stated.
This means that if the market fails to recover until the settlement at the end of the week, the profitable traders will have to undertake the losses. According to the available data, the quarterly open contracts amount to $800 million, with more than a half of this sum in the short positions may remain uncovered amid the bankruptcy of the contract holder.
However, it is also possible that the players opened and closed positions, so they would not face settlement until Friday. As a result, it is difficult to determine the exact profit/loss amount over the period under review, though this loss can become the largest profit stripping ever.
For such cases, OKEx has an insurance fund but just for 10 BTC. Thus, this situation can lead to heavy problems for the exchange. Specifically, if the market keeps falling, the platform can suffer losses of up to 50%.