The central bank warned that the trading platform should respond urgently to malicious downtime - Interchain Pulse

Yesterday, two "rights protection" pictures circulated in the cryptocurrency circle, involving two major digital asset trading platforms, OKEx and Huobi. The reason for the "rights protection" pointed out that the two exchanges experienced downtime under the extreme market conditions of Bitcoin on March 12, and some investors were unable to manage their positions immediately, resulting in asset losses.

On the afternoon of the day when the incident fermented, OKEx took the lead in releasing the relevant solution, saying that the platform would give relevant users a suitable proportion of compensation for the inability to trade due to the platform's own reasons. Huobi Global Station told Fengchao Finance that some of the people gathered at the entrance of Huobi China Park were not Huobi Global Station users, and some others did not trade when the market fell sharply that day. At the same time, the platform also stated that it had arranged for someone to contact and follow up with four users who had traded.

Just one day before the two platforms were both "protected", the official WeChat account of the People's Bank of China released the latest "3.15" financial consumer rights protection series of pictures and texts, reminding investors to be wary of the "tricks" of virtual currency trading platforms, including malicious shutdowns and market manipulation.

On social networks, industry insiders linked the central bank’s pictures and texts with the two platforms’ quick responses.

In fact, since March 15, the central bank's official account has started to publish nine articles on the theme of "Financial Rights Protection" to the public, targeting various financial risk prevention measures such as telecommunications fraud and illegal fundraising. Honeycomb Finance noticed that three of them involved blockchain and digital currency.

Whether for the general public or those working in the cryptocurrency industry, domestic regulators have always maintained a "crackdown" attitude towards cryptocurrency-related financing and other behaviors.

The two major platforms respond to rumors of "rights protection"

On the morning of March 23, two "rights protection" pictures spread throughout the cryptocurrency circle, with the "rights protection" targets pointing to two digital asset trading platforms, Huobi and OKEx. The "rights protection" pictures circulating online involving the two platforms showed people gathering and holding large-character posters.

Some media reported that the "rights protection" against the two exchanges may be related to the fact that the trading platform became stuck when the cryptocurrency market experienced extreme conditions on March 12, causing users to be unable to operate.

Currently, Huobi and OKEx both provide contract trading services. According to feedback from investors, on March 12, Bitcoin plummeted by more than 20% from $7,780 to $6,133. Under extreme market conditions, the contract trading pages of Huobi and OKEx had been stuck, and users' closing and opening operations were temporarily affected. Under extreme market conditions, users are unable to operate their positions, which is often referred to as "downtime" by investors.

On the afternoon of March 23, OKEx and Huobi responded to the "rights protection" incident one after another.

OKEx's announcement on "Solution to the short-term freeze of perpetual contracts caused by the extreme market conditions on March 12" shows that the OKEx perpetual contracts experienced a short freeze from 18:50 to 19:40 (HKT) on March 12. The platform said that if the platform cannot trade due to its own reasons, the platform will give users a suitable proportion of compensation.

OKEx’s solution to contract lag

The announcement stated that OKEx staff has proactively contacted users who had login logs and perpetual contract operations during this period to discuss specific solutions. Currently, the first round of communication has been completed with most of the affected users, and a mutually satisfactory solution has been reached. OKEx reminds that if any user has logged in and traded during the period of freezing, but still has not been connected with the staff, they can submit a work order through the platform for feedback, and then someone will contact them.

Huobi Global responded to Fengchao Finance regarding the investigation of "rights protection". The relevant person in charge said that around 9 am on the 23rd, more than 10 people gathered at the entrance of Huobi China's office park, collectively shouting slogans and taking photos and videos, and left a few minutes later. After verification, some of the above-mentioned people are not Huobi users, and some did not have any trading operations during the market crash on March 12. Among them, 4 are Huobi Global users and had transactions on March 12. Huobi has arranged for someone to contact and follow up. At present, Huobi Global has set up a special processing team to respond to user demands.

In response to the "downtime", Huobi said that after repeated verification, the trading system of Huobi Global Station remained basically stable during the market crash on that day. "The asset system produced a certain range of transfer delays, but it did not affect the normal operation of the transaction. The cases of customer liquidations we have encountered so far were not caused by this." At the same time, Huobi also stated that if any user suffers a liquidation loss due to system problems, they can submit key operation information via email. The platform will retrieve the background log to confirm the situation and clarify the responsibility, and make corresponding arrangements based on the responsibility determination.

In response to the "rights protection" behavior, both OKEx and Huobi Global Station expressed their resistance to malicious rights protection.

OKEx said that the losses caused by normal trading errors may not be real users taking the opportunity to blackmail, and the platform will reserve the right to pursue legal responsibility. Huobi also said that the platform will not agree to "initiate improper claims under the pretext of technical failures."

Within one day, two major exchanges successively reported "rights protection" incidents. Coincidentally, just one day ago, on the official WeChat public account of the People's Bank of China, the title of the latest issue of the "3.15" financial consumer rights protection series of pictures and texts was exactly "Don't be fooled by virtual trading platforms."

The article points out that there are three major "routines" in digital asset trading platforms, including inflating trading volume to create an illusion of prosperity and lure investors into the market; malicious downtime to force leveraged transactions to "explode" and manipulate the market; online fraud and money laundering, etc.

The central bank warns exchanges of malicious downtime routines

The day after the graphic and text prevention, the two major trading platforms were reportedly hit by rights protection due to "downtime". On social networks, industry insiders believed that the two major exchanges responded urgently to the rights protection incident, perhaps because they felt pressure from the warning article of the central bank.

Digital asset transactions have always been subject to regulation in various countries, and the digital currency industry is a disaster area for financial fraud and illegal fundraising. Every year, the "3.15" gala makes people in the currency industry alert, worrying that the digital currency industry will become the target of exposure.

However, this year, due to the impact of the new coronavirus epidemic, CCTV announced that it would postpone the broadcast of the "3.15" Gala. The delay does not mean that the relevant measures to protect consumer rights will disappear. The "late but late" measures will start with the central bank's reminder to the public to guard against financial risks.

In fact, starting from March 15, the central bank’s official account has published nine articles on the protection of financial consumer rights. Honeycomb Finance noted that three of them mentioned scams related to blockchain and digital currency, including central bank digital currency, investment and financial management using blockchain concepts, and virtual currency trading platforms.

In addition to the latest virtual currency trading platform routines, the series of pictures and texts once again remind that the central bank's digital currency (DC/EP) is still under research and testing. The behavior of some institutions impersonating the People's Bank of China to launch "DC/EP" or "DCEP" on asset trading platforms may involve fraud and pyramid schemes. Investors must be vigilant when investing in virtual currencies to guard against illegal fundraising.

The "bullet" of the "3.15" Consumer Rights Protection Day is still on the way, and the chaotic digital currency industry may become a target. Whether for the general public or those engaged in the cryptocurrency industry, the domestic regulatory attitude towards cryptocurrency financing and other behaviors has always been consistent, and the warning line for preventing financial risks is still there.

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