Crypto News- OKB, the native token of the cryptocurrency exchange OKX, experienced a sudden and significant decline in value this Tuesday. In a startling turn of events, the token plummeted by over 50%, reaching a low of $25 within a mere three minutes before finding stability.
OKX Plans to Reimburse Users Following Native Exchange Token Flash Crash
Concerned by this abnormal price fluctuation, executives from OKX promptly initiated an investigation to uncover the root cause behind the sharp decline. In a subsequent update, they revealed that the volatility was triggered by liquidations, set off during a broader market downturn. The OKX team explained that when the OKB price hit $48.36, multiple substantial leverage positions were liquidated, leading to the further liquidation of pledged loans and cross-currency transactions.
OKB Flash Crash Fallout: OKX Vows Compensation, Investigates Root Cause
In response to the incident, the platform announced a commitment to fully compensate users for additional losses resulting from abnormal liquidation, encompassing pledge lending, margin trading, and cross-currency transactions. A detailed compensation plan is expected to be disclosed within the next 72 hours.
The OKX team stated, “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 noted that there have been no significant outflows from OKX reserves thus far. Meanwhile, on-chain analytics platform Spot On Chain raised concerns about suspicious movements in 10 wallet addresses that deposited a collective $9.58 million worth of OKB to OKX last week. Spot On Chain highlighted the possibility that these wallets may belong to a single entity, although it remains unclear if they are connected to the recent selloff.
According to CoinMarketCap data, trading volume for OKB has surged by an impressive 1,668% in the last 24 hours. As of now, the token is trading at $46.76, reflecting a 10% decline over the past day.