Crypto exchange OKX said it would compensate users for abnormal liquidation losses after the OKB token crashed 50% in three minutes on Tuesday.
The native token of crypto exchange OKX, saw a sudden and drastic drop in value on Tuesday.
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Posted January 24, 2024 at 12:31 am EST.
OKB, the native token of crypto exchange OKX, saw a sudden and drastic drop in value on Tuesday. The token plunged by more than 50% to a low of $25 in just three minutes before stabilizing.
Executives from the exchange said they were investigating the root cause behind the abnormal price fluctuation, later issuing an update on X suggesting that the volatility was triggered by liquidations that were set off when the price moved lower after a general decline in the market.
Our team is investigating the recent okb price volatility. We will report to the community later. pic.twitter.com/UI9uPgQfA5
— Star (@star_okx) January 23, 2024
According to them, when the price of OKB hit $48.36, multiple large leverage positions were liquidated, which further liquidated pledged loans, and cross currency transactions,
“The platform will fully compensate users for additional losses caused by abnormal liquidation, including pledge lending/margin trading/cross-currency transactions. The specific compensation plan will be announced within 72 hours,” said the OKX team.
“We will further optimize spot leverage gradient levels, pledged lending risk control rules, liquidation mechanisms, etc. to avoid similar problems from happening again.”
Crypto Quant CEO Ki Young Ju observed that there had been no notable outflows from OKX reserves so far, while on-chain analytics platform Spot On Chain highlighted suspicious movement from 10 wallet addresses that deposited a collective $9.58 million worth of OKB to OKX last week.
🚨🚨 $OKB token suddenly fell sharply (40%) and our system marked ten dormant whales depositing 176,154 OKB ($9.58M) to OKX 7 days ago.
➡️ All 10 wallets received a total of 176,154 $OKB 4 years ago (20 Feb 2020) and had no action after that.
➡️ They deposited all tokens to OKX… pic.twitter.com/EQmiHOinmd— Spot On Chain (@spotonchain) January 23, 2024
“Based on the time, these wallets may belong to one entity,” said Spot on Chain, noting that it was unclear whether these wallets were tied to the selloff.
According to data from CoinMarketCap, trading volume for OKB is up 1,668% over the last 24 hours. The token is currently trading at $46.76, still down 10% over the last day.
