What Does The OKEX Debacle Mean For Bitcoin Futures?

OKEX Bitcoin Futures Debacle Will Attract Scrutiny (Shutterstock)

OKEX released this statement on August 3rd explaining that a very large trade occurred, that it had losses that surpassed the exchanges’ obligation to support, so they are enacting “the societal loss risk management mechanism“.

These are NOT linked to or related in any way, to the futures contracts that trade on the CME or CBOE.  Not every article I have read makes this clear.  So the bright side of this story is that the contracts listed and traded on U.S. exchanges were not involved.  That is encouraging from both a regulatory aspect and for the future potential growth of cryptocurrency linked products in the U.S.

If anything, the problem seems to start with incredibly lax risk management at this exchange.  According to the OKEX statement, the risk management team ‘immediately’ contacted the client to reduce the size of the trade – begging the question – how did their risk…