Hedge Fund Complains to Hong Kong Stock Exchange: Manipulating Contract Rules and Blowing Up 400 Million Yuan

This Monday, a piece of news, "Cryptocurrency investment funds complain to the Hong Kong Stock Exchange about OKEx," caused a stir. Five digital cryptocurrency investment funds jointly denounced the exchange for unfair treatment in OKEx futures trading. One of the funds, Amber AI, lost a certain amount of investment due to OKEx's multiple unfair operations on BCH futures. This fund was just named "the best performing digital cryptocurrency fund institution" by Bloomberg this year.

According to Bloomberg, in addition to Amber AI's losses due to OKEx's handling of futures issues, four other unnamed institutions also plan to withdraw funds from OKEx or sever ties with OKEx. One of them has filed a complaint with the Hong Kong Securities and Futures Commission (the report mentioned that OKEx is a company registered in Hong Kong), and the Hong Kong Securities and Futures Commission declined to comment.

Regarding the market manipulation, OKEx said that the reason for not notifying users in advance was that "we considered many scenarios and believed that this was the fairest and most reasonable approach to maintaining an orderly market." According to the OKEx User Agreement, OKEx has the right to deliver contracts in advance under special circumstances. If there are any questions, they can negotiate or sue in Seychelles. The investment fund refuted it, saying that OKEx is the only exchange in the market that delivers in advance.

BlockBeats contacted Amber AI, and the other party expressed the hope that OKEx can achieve formality and transparency, so as to improve and maintain a healthy and orderly trading environment.

BlockBeats believes that the investor's complaint to the Hong Kong Securities and Futures Commission may affect OKEx's capital planning route in Hong Kong. More importantly, it will affect its credibility among the industry and institutional investors. This is also the first time that an institutional investor has questioned the fairness of OKEx platform transactions after many retail investors have defended their rights.

As Amber AI said, after OKEx encountered multiple system problems, it urgently needs to prove to the market and investors the reliability and transparency of its exchange operations, rather than just issuing statements on the platform and hastily shirking responsibility.

Below is a translation of the original Bloomberg report and Amber AI’s complaint against OKEx on Medium.

The full text is 18,000 words long and takes 30 minutes to read.

Bloomberg:

Furious Traders Slam Crypto Exchange for Fiddling With Contracts

Crypto exchanges tamper with futures contract terms, angering traders

An unorthodox move by one of the world's biggest cryptocurrency platforms to change the terms on $135 million of derivative contracts has infuriated some traders and saddled several with losses, underscoring the risks of using unregulated virtual currency exchanges.

Recently, one of the world's largest cryptocurrency platforms made an unusual move. It changed the terms of a derivatives contract worth $135 million, which angered many market participants, caused some of them to suffer heavy losses, and reminded everyone that unregulated cryptocurrency exchanges have huge potential risks.

The episode at Hong Kong-based OKEx, which claims to handle more than $1 billion of crypto trades daily, involved futures on Bitcoin Cash, the virtual currency that split into two last week. In a decision that traders described as unusual if not unprecedented, OKEx forced the early settlement of its Bitcoin Cash contracts without warning on Nov. 14, just as prices were tumbling.

The main character of this incident is Hong Kong-based OKEx, a cryptocurrency exchange with a daily trading volume of 1 billion US dollars. The exchange's Bitcoin Cash (BCH) futures contract caused this controversy. BCH forked last week, resulting in it being divided into two chains. OKEx forced the Bitcoin Cash futures contract to be delivered in advance on November 14 without prior notice, and the market price fell sharply.

The move blindsided traders including Qiao Changhe, who said his fund lost $700,000 because its hedging position on OKEx was abruptly closed at a level that didn't reflect prevailing market prices.

Such a move caught many traders off guard. One trader, Qiao Changhe, said his fund suffered a loss of $700,000 because its hedge position on OKEx was suddenly closed at a price that did not reflect the mainstream market price.

Qiao, a former energy futures trader who now runs Cayman Islands-registered Consensus Technologies, said he would reduce his $5 million fund’s use of OKEx because of the way it handled the Bitcoin Cash settlement. Four other traders who asked not to be named discussing private information also said they would scale back or end their relationships with the exchange. One of them filed a complaint with Hong Kong’s Securities and Futures Commission. An SFC spokesman declined to comment.

Qiao, a former energy futures trader who now runs Consensus Technologies, a fund registered in the Cayman Islands, claimed that he would reduce the $5 million in funds originally traded on OKEx because of OKEx's early delivery. In addition, four unnamed traders also mentioned in private conversations that they would alienate or end their relationship with the exchange, and one of them even filed a complaint with the Securities and Futures Commission of Hong Kong (SFC). A spokesman for the Hong Kong Securities and Futures Commission declined to comment.

"OKEx is losing its credibility," Qiao said. "The futures contract became something nonsense, not something we could use to hedge."

“People are losing trust in OKEx,” Qiao said. “Its futures contracts have become ridiculous. It can no longer be called a financial product that can be used for hedging.”

In a series of statements after the early settlement, OKEx apologized for “the inconvenience it may cause” but said the decision was taken to protect customers from the volatility associated with the Bitcoin Cash split.

After the early delivery of the contract, OKEx issued a series of statements apologizing for the "inconvenience caused" by the move, but claimed that the decision was made to protect users from the price volatility brought about by the Bitcoin Cash fork.

The exchange said it acted without notifying clients to reduce the risk of market manipulation. “After considering various scenarios, we decided that an early settlement was the most fair and rational decision to maintain an orderly market,” Andy Cheung, head of operations at OKEx, said in a response to questions from Bloomberg.

The exchange said it did so without notifying users to reduce the risk of market manipulation. "After considering different situations, we believe that early delivery is the most fair and rational decision to maintain market order," Andy Cheung, director of operations at OKEx, said in an interview with Bloomberg.

Crypto traders who spoke with Bloomberg said OKEx was the only exchange they knew of that forced early settlement of Bitcoin Cash contracts.

Crypto traders who spoke to Bloomberg News said OKEx was the only exchange they knew of that offered early delivery of bitcoin cash contracts.

“It may not be illegal, but it is very unusual,” said Andrew Sullivan, a former managing director for sales trading at Haitong International Securities Group.

"It may not be illegal, but it is definitely very abnormal," said Andrew Sullivan, a former managing director of sales and trading at Haitong Securities.

The controversy is just the latest to emerge from the nascent world of cryptocurrency exchanges, which proliferated over the past two years as wild swings in Bitcoin and its ilk vaulted digital assets into the public consciousness. The trading venues, most of which operate with little to no regulation, have been dogged by everything from market manipulation to trading outages and cyberthefts.

As digital currencies such as Bitcoin have become more popular in the past two years, controversies about digital currency exchanges have gradually emerged. Most of these trading venues operate without supervision, and market manipulation and hacker attacks often occur.

A lack of confidence in crypto exchanges is one reason many institutional investors are proceeding cautiously as they weigh whether to add exposure to digital assets. The slow pace of mainstream adoption has contributed to deep losses in virtual currencies this year, erasing about $650 billion from the value of digital assets tracked by Cryptocurrency Market Capitalizations | CoinMarketCap.

Distrust of digital currency exchanges is one of the important reasons why institutional investors have been reluctant to use digital currency as an asset allocation. The slow application and popularization of mainstream markets has also led to a sharp decline in the market value of virtual currency this year. According to CoinMarketCap, the market value of the cryptocurrency market has lost nearly $65 billion this year.

OKEx, which was founded by Star Xu, the entrepreneur behind Chinese crypto exchange OKCoin, has been criticized by traders before. In August, the exchange imposed losses on clients after it was unable to cover the shortfall from a massive wrong-way bet by one of its users. While the decision complied with OKEx’s longstanding “socialized clawback” policy, the episode left many questioning the exchange’s ability to manage risk.

OKEx, founded by Chinese entrepreneur Xu Mingxing, has been criticized by traders. In August, the exchange imposed losses on other customers on the platform because it could not cover the losses caused by one user's wrong bet. Although this decision was later announced

It was explained as a "community loss" policy, and after the incident the industry had great doubts about its risk control capabilities.

In the latest incident, traders found several reasons to fault OKEx on top of the exchange’s decision to force early settlement of its Bitcoin Cash futures.

In this incident, traders found multiple loopholes in OKEx's decision to deliver BCH futures early.

Before the contracts were terminated, OKEx announced a change to the composition of the underlying index, replacing one of its price sources. The move occurred during live trading, and triggered a significant repricing of the contracts, according to Amber AI, a crypto market-making firm founded by former Morgan Stanley trader Tiantian Kullander.

Before the futures contract ended, OKEx released an announcement about the change in the underlying index structure, replacing one of the price sources. According to Tiantian Kullander, founder of digital currency market maker Amber AI and former Morgan Stanley trader, this announcement was issued while trading was ongoing, triggering a significant price reconstruction.

On Nov. 15, a day after the Bitcoin Cash futures settled, a technical malfunction at OKEx left traders unable to execute orders for more than two hours, during a time of heightened market volatility, Amber AI said in a blog post on Monday titled "OKEx-- It's Time to Pay the Piper." The firm called for "regulation and transparency at OKEx in order to promote and maintain a healthy and fair trading environment."

In a blog post titled "OKEx - It's Time to Pay the Piper" published on Monday, Amber AI pointed out that on November 15, one day after the BCH futures were delivered, a technical failure on the OKEx platform prevented market participants from executing orders for more than two hours during a period of large fluctuations. The agency called on OKEx to be "more transparent" to create a healthier and fairer market environment.

Amber Ai Medium

OKEx Its time to pay the piper

Over the past week, we have seen market manipulation by OKEx, with an estimated $400 million+ worth of futures contracts being forced liquidated. The Bitcoin Cash ($BCH) network regularly undergoes protocol upgrades twice a year. Due to consensus conflicts between different development teams, a hard fork was scheduled for around 4:40pm GMT on November 15th. As the disagreement between Bitmain (ABC) and CoinGeek (BSV) intensified, the exchange operators had to choose a public chain to continue supporting the index on their platforms.

Over the past week we have seen behavior indicative of market manipulation by OKEx, and estimate $400mm+ of futures contracts have been forced into liquidation as a result.

The Bitcoin Cash ($BCH) network goes through regular protocol upgrades twice per year. As there has been conflicting consensus changes between different development teams, a hard fork was scheduled to occur on the 15th of November around 4:40 PM GMT. As the battle between Bitmain (ABC) and CoinGeek (BSV) intensified, exchange operators have had to pick a side regarding which chain they will continue to reference their indices against.

November 9

OKEx decided their position before the fork and issued an announcement stating: "After the hard fork is over, our BCH futures contracts will support BCH (Bitcoin ABC)."

Like most exchanges, OKEx has decided to support ABC. If BSV becomes the only surviving public chain after the fork, the value of the current futures contracts (which now support ABC) will be zero. Market participants have also begun to price this risk relatively, selling contracts before the pre-fork to cover it back. We recently published an article pointing out this trading opportunity.

As the hard fork approached, the BSV camp gained more support than the ABC camp, and futures contracts on BitMex ($BCHZ18) and OKEx ($BCH1116 and $BCH1228) began to show a large discount to BCH spot.

November 9

OKEx decide their stance ahead of the fork, quoting "After the hard fork, our BCH futures contracts subject will be BCH (Bitcoin ABC)". The full announcement can be read here.

OKEx decided to reference ABC, following suit of many other exchanges. In an outcome where two chains would not co-exist after the fork and BSV is the surviving chain, the value of the prevailing future contracts (which now reference ABC) could settle worthless. Market participants began pricing for this risk accordingly, selling the contracts in anticipation to cover it back lower ahead of the pre-fork snapshot. We also highlighted this opportunity in our recent post which can be read here.

With the BSV camp gaining momentum over ABC going into the scheduled hard fork, future contracts on both BitMex ($BCHZ18) and OKEx ($BCH1116 and $BCH1228) were starting to price in steep discounts to BCH spot markets.

November 12

OKEx announced "Updates to Futures Trading Index Calculation Rules and Futures Trading Component Indexes". In this announcement, OKEx decided to stop quoting Bitfinex spot prices to change the calculation components. By changing the rules of the delivery index, they forced the market to re-price the index basis; this is a huge change given that the market still has a large amount of open contracts and a significant discount of USDT to the US dollar. We believe this move is an attempt to deliberately interfere with the price of futures contracts.

November 12

OKEx announces an "Update on Indices Computation Rules & Indices Constituents for Futures Trading". In this update, OKEx decided to change constituent calculations by discontinuing to reference Bitfinex prices in the spot indices. By changing the rules of the settlement index, they forced the market to reprice the index basis; a drastic change given the large open interest in the market and the significant USDT-to-USD discount. We see this as a deliberate attempt to interfere with prices of the underlying futures contracts, amidst live trading.

November 14

OKEx BCH futures trading limits fell, with contracts (referenced to ABC) priced 25% below the current BCH spot index. Trading was suspended as the system no longer allowed orders to be submitted. During this period, Poloniex-ABC and the BitMex equivalent BTC-denominated BCH contract ($BCHZ18) were trading at a 20% discount to the market price on OKEx.

OKEx also announced that it will deliver BCH futures contracts ahead of schedule at the last trading price at 09:05 CET (UTC +1) on November 14, 2018, instead of allowing the market to float freely or continuing to enforce the limit price rule. The full announcement can be read here:

November 14

OKEx BCH futures trade limit-down, with the contracts (referencing ABC) pricing a 25% discount to the prevailing BCH spot index. Trading is halted as order submissions are no longer allowed. During this time, Poloniex-ABC and the equivalent BTC-denominated BCH contract on BitMex ($BCHZ18) is trading at a 20% discount to OKEx.

Instead of allowing the market to free-float, or continuing to enforce the limit-down rule, OKEx announces that they will settle the BCH futures contracts early against the last traded price at 09:05AM Nov 14, 2018 CET (UTC +1). The full announcement can be read here:

By changing the delivery date and rules, OKEx went against its previous announcement and went against the open interest in the market. This means that OKEx imposed a fixed loss on every contract with a short position in the market, making the contract delivery price 20% higher than fair value. This is similar to the Chicago Mercantile Exchange (CME) announcing that the S&P500 E-Mini futures will be delivered to the Shanghai Composite Index during trading.

By changing the settlement date and delivery rule against the open interest in the market, they invalidated their previous announcement. This meant that for each short position carried in the contract, OKEx implicitly imposed a fixed loss on the notional amount, delivering the contract 20% higher vs fair value. This is no different than the Chicago Mercantile Exchange (CME) announced that the S&P 500 E-Mini Futures will settle against the Shanghai Composite Index in the midst of trading.

A total of 296,316.51 BCH contracts were delivered at a premium of $80 to ABC ($330 for Poloniex-ABC and $408.8 for OKEx), bringing the total loss of short positions in the market to approximately $24 million. Based on our speculation, OKEx’s internal trading desk held an opposite position of shorting contracts.

296,316.51 BCH worth of contracts settled at $80 higher vs ABC ($330 on Poloniex-ABC vs $408.8 OKEx), bringing the aggregate loss for short-positions in the market to roughly $24mm. There exists market speculation that OKEx’s internal trading desk carried the opposite position against short-sellers.

According to the announcement previously released by OKEx, market participants have priced BCH1116/1123/1228 contracts for delivery to ABC. They forced market participants with two-legged trading to sell long positions related to ABC, resulting in a large number of liquidations of BCHZ18 and Poloniex-ABC, causing a sharp drop in prices. These actions can be called one of the most serious frauds and market manipulations in the history of the digital currency trading market.

As the market had already priced for $BCH1116/1123/1228 contracts to settle against ABC (as per the previous announcement), they effectively also forced all market participants with dual-legged trades to liquidate long positions in ABC-related risk, resulting in a slew of liquidations in $BCHZ18 and Poloniex-ABC, causing sharp declines. This is indicative of outright market manipulation and one of the more serious acts of fraud in the history of limit order book trading in the cryptocurrency markets.

OKEx officials said: "There is currently no Bitcoin/ABC trading pair with sufficient depth and volume to form a Bitcoin delivery index." However, this statement is contradictory, because the average daily trading volume of ABC and BSV on P network before the fork has exceeded 1000+BTC respectively. In comparison, this is more than 50% higher than the 24-hour average trading volume of Bitcoin Gold (according to CoinMarketCap), and BTG constitutes the spot index for delivery of BTG futures on OKEx.

In the official announcement, OKEx cites: "there is no Bitcoin ABC trading pair with enough market depth and trading volume to compose an index for delivery". However this is contradictory, as the average volume in the pre-fork ABC and BSV pairs on Poloniex were exceeding 1,000+ BTC-equivalent per day, each. For comparison, this is 50%+ higher than the average 24h volume in BTG (as reported by CoinMarketCap), which composes the spot index against which the OKEx BTG futures settle against.

November 15 (12AM-2AM Hong Kong time)

OKEx’s ordering system began to malfunction, with buyers and sellers unable to place orders due to a “limit order bug”. This problem was experienced by all users, including traders who clicked on the web page to place orders, as well as traders who placed orders through the API program. For more than two hours, market participants were unable to reduce or increase their positions, a period of time that was the most volatile in the past nine months.

Market participants cannot send market orders during the period of 12AM-2AM

November 15 (12AM — 2AM HKT)

OKEx’s order submission system starts malfunctioning. Both buyers and sellers are unable to submit orders due to a “Limit Order Bug”. This problem was consistent for all users, both manual point-and-click traders, as well as program traders interacting with OKEx via API. Over a period of 2h+, market participants were unable to reduce or add risk during the most volatile trading session in 9 months.

During this period, the market's cumulative liquidation orders exceeded US$400 million, plus the impairment of the following transaction targets:

189mm BTC

108mm ETH

74mm EOS

8.2mm XRP

8.2mm LTC

12mm BTG & ETC

The market estimate of total liquidations during this period exceed USD 400mm+ conceptual with the following USD-equivalent breakdown per ticker:

We estimate that the cumulative loss of all leveraged accounts is about 10% of the total liquidation amount. The level-2 data flow recorded during this period shows that the matching engine is normal, the exchange can be continuously accessed and operate normally, but all buy orders above the bid level and sell orders below the ask level are blocked.

We estimate the aggregate loss from all margin accounts to be around 10% of the total liquidation value. Recorded level-2 data throughout this period shows the order matching engine as functioning. The exchange continued to host traffic and operate but with all order submissions blocked, except buy-orders below the best bid, and sell-orders above the best offer.

OKEx insists that this is due to "limit price terminal instability caused by system overload problems." However, if the overload is caused by too many concurrent orders, the system backend should not be able to respond to all requests beyond the server performance. The exchange either responds to the correct order or refuses to process all order requests. For example, when Microsoft Excel crashes, the form calculation results will not change. The backend either generates the correct limit price or stops altogether, rather than some orders being placed and some not. Since the failure is not due to overload, the only possible reason is internal manipulation.

The picture shows: Your order exceeds the price limit, and the highest bid you can submit is $4,895.16 (the market mid-price at the time of the screenshot is $5,120.00)

OKEx insists that this was due to a 『system overload issue resulting in instability on the price limit endpoint』. However, in the case of traffic overhaul on the back of a rush of simultaneous orders, the back-end infrastructure would not be able to process requests beyond the server capacity. The exchange either generates a response with the correct order information, or refuses to process an order submission request. To put it differently; spreadsheet calculations do not change when Microsoft Excel is crashing. The back-end either generates the correct price limit, or stops altogether, there can be no in-between. Since the issue is not due to overload, the only plausible explanation is internal manipulation.

Since traders cannot act as takers, during the "system overload" period, the counterparty in the order book can only be OKEx itself. As early as March 30 this year, OKEx experienced a huge chain liquidation event, and many leveraged accounts were liquidated. At that time, they decided to roll back the transactions to before the liquidation and called it "market manipulation." But in the latest incident, OKEx decided not to roll back any transactions and issued an official statement. We believe that OK's change of position may be related to the positions held by its internal trading team (whose positions are in the opposite direction of the positions of other market participants).

With market participants unable to act as takers, the only price-aggressor in the order book during the 『system overload』 could have been OKEx themselves. Earlier this year on March 30th, OKEx faced a large cascading liquidation event which wiped out aa large number of margin accounts. The exchange decided to roll back all trades preceding the contract liquidations, citing 『market manipulation』. However in the latest incident, OKEx has decided not to roll back any trades, and has yet to issue an official announcement. We view the change in stance this time as being due to the positioning of their internal trading desk (which nets off as zero vs. the rest of the market).

November 15 (10:48PM Hong Kong time)

Following the traders’ doubts, OKEx immediately shared the article from Fengchao Finance

November 15 (10:48PM HKT)

Following scrutiny from the trading community, OKEx shares the following link on Chinese social media:

This article quoted a post on Reddit. A retail investor u/Allofoobtc who claimed to be neutral wrote a long explanation about why OKEx delivered BCH contracts early. The style, tone and content of this post were extremely similar to the explanation released by OKEx itself. The time when this Reddit post was published was 2 hours after the time when Honeycomb Finance published the article.

The article, by 『Honeycomb Finance』 references a Reddit post by an 『independent trader』 under the moniker u/Allofoobtc who has written a lengthy post on the reasoning behind OKEx』s early contract delivery. The style, language and content of the post exhibits a striking resemblance to OKEx』s own explanation. The timestamps between the Reddit post and Honeycomb』s publication are 2 hours apart.

As we dug deeper, we found that the u/Allofoobtc account was created only two months ago and had only published four posts: one questioning the "unethical operating methods" of the BitMex exchange, one criticizing the Huobi exchange, one sharing an article by a "guest author" praising OKEx as better than BitMex, and the last one was the most recent one, explaining why OKEx's early delivery was a "good decision."

Upon deeper inspection, we see that the u/Allofoobtc account has been active less than 2 months, and has only 4 posts of which: 1 post questions rival BitMex over "unethical operations", 1 post criticizes rival Huobi, 1 post shares a 『Guest Author』 article praising OKEx over rival BitMex (sponsored), and the most recent post validating the early contract delivery on OKEx as a "good decision".

Based on all the evidence, we can infer that this user was operated by OKEx. At the same time, OKEx also (most likely) paid CoinIdol to publish the article comparing OKEx and BitMex, and sponsored Fengchao Finance to promote the Reddit post. Fengchao Finance is very likely OKEx's crisis PR company; the media outlet conducted an exclusive interview with Xu Mingxing (OKEx CEO) after the arrest incident, and they are also the only media outlet to do so.

With basic abductive reasoning it becomes evident that the operator behind this moniker is OKEx, and that the exchange (probably) paid CoinIdol for the BitMex vs OKEx article, and also sponsored Honeycomb to publish the Reddit post. Honeycomb is likely OKEx’s external crisis-PR firm, having been the sole media outlet to have hosted an interview with Star Xu (OKEx CEO) following his recent arrest.

November 17

OKEx quietly revised its previous announcement. The screenshot below is an OKEx announcement released on November 12, in which the third point explains the details of BSV distribution: This announcement indicates that leveraged users who have lent BCH do not need to repay BSV.

The initial announcement on November 12 clarified that users who borrowed BCH after the fork would not be responsible for returning BSV.

November 17

OKEx silently makes an amendment to a previous announcement. The below snapshot, from November 12, details the BSV distribution plan in bullet point 3. This term states that if users have outstanding borrow of BCH, the will not need to repay BSV.

The original announcement on November 12 states that BCH borrowers will not incur a BSV-liability after the fork.

The following screenshot is also from the OKEx announcement center, but it has been modified. OKEx secretly removed the third point of the previous announcement in an attempt to deceive their users.

This announcement was originally published on the 12th, but it also shows that it was "last modified" on the 17th.

The below snapshot is the same announcement page, amended. In an underhanded attempt to deceive their users, OKEx’s removes the original bullet point 3 entirely.

The post was originally published on November 12, and shows as 『last updated』 on November 17.

On November 17, OKEx secretly removed the third point from the announcement made five days ago.

On November 17, secretly resorts to backdating, removing the original bullet point 3 from their November 12 announcement.

November 18

OKEx later required users who lent BCH to also return BSV. In their latest announcement, they wrote: "Users who have borrowed but not returned BCH: must return BCHABC and BCHSV at the ratio of 1BCH=1BCHABC+1BCHSV. Priority will be given to using USDT in their original BCH leverage account to convert into BCHABC and BCHSV at the current currency-to-currency trading price and return to OKEx. If the assets are insufficient, the BCHABC and BCHSV they should receive will be used to offset them."

November 18

OKEx imposes a BSV liability for BCH borrowers. In the new announcement, they state: "If you have an outstanding BCH loan amount: you will have to repay the amount in BCHABC and BCHSV based on the ratio 1 BCH = 1 BCHABC + 1 BCHSV. First, the USDT in your margin account will be converted to BCHABC and BCHSV according to the token trading market price of that time to repay the amount. Then, if it is not enough, you will have to cover the amount by your BCHABC and BCHSV distribution.”

1. OKEx’s initial statement indicated that BCH borrowers who have not yet repaid BCH do not need to pay BSV. Traders in multiple communities have also received confirmation of this policy from OKEx customer service.

2. OKEx quietly revised its initial announcement, removing and invalidating the previous policy.

3. OKEx then made an announcement that users who lent BCH now need to return both ABC and BSV to the exchange.

1. OKEx originally stated BCH borrowers will not need to repay BSV. Multiple users in the trading community also received ongoing validation from OKEx customer support, reaffirming this policy.

2. OKEx quietly amends the original announcement, removing and invalidating the prior policy.

3. OKEx announces that users who have borrowed BCH now owe both ABC and BSV to the exchange.

There is strong evidence that if there was no gross negligence or market manipulation, then there is no need for OKEx to hide behind anonymity and engage in hasty and immature publicity. The series of events surrounding the BCH hard fork demonstrated OKEx's manipulation, fraud and deception of the market. But OKEx failed to provide an explanation.

Should there be evidence beyond reasonable doubt that no act of gross negligence or market manipulation has taken place, there would be no need for OKEx to hide behind anonymous monikers and resort to sloppy, unsophisticated propaganda. The course of events surrounding the BCH hard fork are indicative of market manipulation, fraud and deceit.

OKEx has failed to provide an explanation.

As an active market participant and liquidity provider in the global spot and derivatives markets, we call for regulation and transparency on OKEX to promote and maintain a healthy and fair trading environment.

As an active market participant and liquidity provider in the global spot and derivative markets, we are calling for regulation and transparency at OKEX in order to promote and maintain a healthy and fair trading environment.