OKX loses $1.5bn in less than 20 minutes in brutal flash crash

With markets swinging bearish, few were hit as hard as OKX’s token.
The exchange token crashed double-digits in less than 20 minutes.
Affected users can expect a 100% refund, said an OKX note.

Even by crypto standards, the 50% freefall on Tuesday of OKX’s exchange token in mere minutes was a sight to behold.

The plunge wiped out $1.5 billion in market value based on the token’s circulating supply, leaving the OKB token worth $2.5 billion, according to CoinGecko and OKX.

“OKB experienced high volatility for about three minutes, reaching a low of 25.1 USDT before the market stabilized,” the exchange wrote in an announcement.

Even more startling: Affected users are eligible to get fully reimbursed in the next 72 hours, according to a tweet by the exchange.

The Seychelles-based exchange blamed the drop on a “downward trend of the overall market,” triggering a cascade of liquidations. OKX’s chief operating officer, Jason Lau, told DL News that the team is still investigating the issue.

“All other markets are functioning and there was no issue with our risk or liquidation systems,” he said.

‘Back to normal’

The token has since reclaimed some of its losses and is now trading at just over $47, which OKX said is “back to normal.”

Liquidations are common in crypto, a market that combines hefty volatility and high levels of embedded leverage.

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During serious price swings – like OKB’s move this afternoon – traders may be forced to sell their positions. Traders can rejoice, however, after the exchange did something virtually unheard of in the markets — it said “the platform will fully compensate users” and release a repayment plan in the next 72 hours.

Lau did not provide additional information as to why this specific liquidation demanded an investigation and user reimbursement.

Exchange tokens like OKB offer holders specific bonuses like reduced trading fees or access to a platform’s in-house token sales.

The bearish move comes amid a wider market downturn on Wednesday. Bitcoin is down 3% over the day, and Ethereum is down 6%.

The wider crypto market capitalisation has fallen more than 4%.

Liam Kelly is DL News’ Berlin correspondent. Contact him at liam@dlnews.com.