Cryptocurrency exchange BitMEX has decided not to pay compensation to users who suffered losses due to a 56% crash in the XRP rate on Thursday.
A user on Twitter published a letter from BitMEX saying that the exchange is aware of the price movement under the XRP/USD contract, which triggered the stop orders of some users since they are executed at the latest bid price, and not at the marking price or index price.
According to BitMEX, its system worked as intended and does not require additional intervention.
"The volume of execution of stop orders, supplemented by a lack of liquidity in the order book, led to a sharp change in the rate," the exchange said.
The exchange claims it uses "a fair price labeling system" for such sort of situations, which avoids a number of unnecessary liquidations in this case. However, the exchange will not cancel the transaction or pay compensation in this case, the support center at BitMEX explained.
Lawyer Jake Chervinsky says if BitMEX was regulated by the U.S. authorities, it would at least have to talk to someone from the Commodity Futures Trading Commission (CFTC) or even conduct a full internal investigation to determine how exactly the collapse occurred.
On February 13th, the price of XRP on BitMEX instantly fell by almost 60% down to $0,13.
Earlier BitMEX leaked thousands of user private data. Some clients of the exchange received letters containing the email addresses of other users.
Access more than 50 of the world's financial markets directly from your EXANTE account – including NASDAQ, London Stock Exchange and Tokyo Stock Exchange.
Subscribe to our Telegram channel to stay up to date on the latest crypto and blockchain news.