On Thursday, the newly-introduced XRPUSD perpetual contract devalued by 56% spontaneously. The price of XRP plunged from $0.33 to $0.13 before rebounding seconds later above $0.32. This downswing was so violent that some BitMEX traders had their entire accounts wiped out.
Agitated traders took to Twitter to vent about their unfortunate losses and demand refunds from the derivatives exchange. However, BitMEX explained that based on their investigations, the incident was not their fault and will therefore not give any refunds or rollbacks.
XRP Traders Got Rekt On BitMEX
A few days ago, the price of XRP plummeted to $0.13 in a single one-hour candle on BitMEX. Surprisingly, this happened whilst the asset was trading above $0.33 on other exchanges. With this sudden drop, many traders on the exchange lost all their holdings as they claimed the platform failed to trigger their stop losses.
Moments later, BitMEX issued a statement saying the drop was a result of a lack of liquidity and not a mistake on their part. Thus, they would not compensate the affected traders. The fact that BitMEX boss Arthur Hayes had made snide comments about XRP hours before this unfortunate incident only aggravated the situation. Some crypto observers, therefore, speculated that this could have been a calculated move.
Regardless, BitMEX issued another detailed statement on Feb 14.
There Were No Liquidations On XRPUSD: BitMEX
In a tweet thread, BitMEX explained that on Thursday as the price of XRP plunged to mortifying lows, their system worked exactly as expected and prevented any liquidations. In other words, the platform did not liquidate any orders that traders had placed. This is because the Fair Price Marking method ensured that users’ assets were not liquidated.
BitMEX also pointed out that stop market orders set by traders to trigger on the Last Price would have triggered as designed due to such an abrupt move. The platform added:
“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 fill the whole order at; Fair or Index Price triggers aren’t directly affected by the Last Price.”
In conclusion, the exchange noted that its Insurance Fund cannot be used in this case. The fund protects users in the event of unfilled liquidations but not from slippages on market orders.
Notably, this elaborate explanation has not helped improve BitMEX’s dented reputation. Most of the Twitter users commenting on the post still believe it was the exchange’s fault. The word “scam” was mentioned a lot also and some even noted that they have closed their BitMEX accounts.