OKEx's Future Trading Shortfall 'A Valuable Lesson' for Cryptocurrency Exchanges

The world of futures trading in Bitcoin for the traditional investor is still very new, as it only opened in December of last year when CBOE and CME launched their products to the market in what was expected to be a big boost for Bitcoin adoption.

OKEx announced its BTC, BCH and ETH futures trading on November 3, 2017.

Even with this jump on the futures market, and being the second-largest cryptocurrency exchange by volume, OKEx has had its issues with futures trading thus far.

In May, OKEx had to deal with China National Radio's "Voice of China" program that alleged that OKEx was illegally trading cryptocurrency futures in the country, which has essentially banned all usage of digital currencies within its border.

Now, on August 3, OKEx was faced with a sticky situation in which a 'Whale' trader's wrong-way bet on Bitcoin forced a liquidation of a futures contract, forcing other traders to foot the bill.

Speaking to Cointelegraph, OKEx head of operations, Andy Cheung, said that this has been a "Valuable lesson" for him and OKEx, as they continue to try to improve the trading experience.

While a lot of what happened fell a bit outside of OKEx's control, such as the outlandish trade and the volatile movement of Bitcoin that forced the liquidation, OKEx says it was a valuable lesson for themselves, but is also encouraging futures traders to understand the mechanisms.

"We would say this is a valuable lesson for us in improving our trading experience. We always encourage our customers to study the mechanism behind futures trading before joining the game to avoid unexpected losses."

"The clawback mechanism has been running orderly since [it] launched, and it is widely adopted by major exchanges around the world. Another major exchange that provides margin trading, BitMEX, also adopts a similar auto-deleveraging mechanism, which closes liquidation orders by deleveraging counterparties' positions by profit and leverage priority."

Futures trading in Bitcoin, as well as other cryptocurrencies, still has a long road to go before it can be considered totally fail-safe - and even then, there are bound to be mishaps.