Mainstream cryptocurrency exchange OKX has officially released its compensation plan following the sudden 50% flash crash of its platform token OKB on January 23. The exchange will airdrop USDT to eligible users' funding accounts by February 1.
The OKB Flash Crash Incident
On January 23 at approximately 5:00 PM UTC+8, OKX's platform token OKB experienced an unexpected 50% price drop, plunging to $25.10 at its lowest point. The exchange later attributed this abnormal volatility to a cascade of liquidations triggered by large leveraged positions.
"OKB's decline initially followed the broader market downturn on January 23. When the price hit $48.36 at 17:07:26 UTC+8, it triggered liquidations of several large leveraged positions. This subsequently caused liquidations in margin lending, leveraged trading, and cross-currency trading, creating a snowball effect that led to OKB's sharp decline."
OKX committed to fully compensating users for additional losses caused by abnormal liquidations, including those related to:
- Margin lending
- Leveraged trading
- Cross-currency trading
The exchange also promised to optimize its risk control rules and liquidation mechanisms to prevent similar incidents.
Compensation Plan Details
OKX formally announced its compensation plan on January 26, outlining the following key points:
USDT Airdrop for Eligible Users
The exchange will distribute compensation in USDT to affected users' funding accounts by February 1. Eligibility criteria include:
- OKB-involved leveraged trading positions
- OKB-collateralized margin lending
- OKB-included cross-currency margin accounts
Coverage of Losses
The compensation will specifically address:
- Price difference losses: The gap between OKB's price at $48.36 (when liquidations began) and the actual liquidation price
- Penalties and fees: All liquidation-related fines and transaction costs
- Multi-asset liquidations: Cases involving OKB as part of multiple collateral assets
👉 Learn more about OKX's risk management framework
Community Response to Compensation Plan
While some users appreciated the compensation initiative, others expressed concerns:
- Some requested compensation in OKB tokens rather than USDT
- Others argued the plan doesn't constitute full reimbursement, particularly for leveraged positions
- Several traders noted they're receiving "less than half" of their actual losses
OKB's price has rebounded significantly since the incident, currently trading around $51—a 6.7% increase over 24 hours and nearly recovering all pre-crash losses.
FAQ Section
Q: When will I receive my compensation?
A: OKX will distribute USDT airdrops by February 1, 2024.
Q: What types of accounts qualify for compensation?
A: Eligible accounts include those with OKB leveraged positions, OKB collateralized loans, or OKB cross-currency margin positions affected by the liquidations.
Q: Why is compensation being made in USDT rather than OKB?
A: OKX hasn't publicly explained this decision, but USDT provides price stability compared to volatile token prices.
Q: Will OKX change its liquidation mechanisms?
A: Yes, the exchange plans to optimize risk parameters and liquidation rules to prevent similar incidents.
👉 Explore OKX's trading platform
Moving Forward
OKX's response demonstrates crypto exchanges' growing responsibility toward user protection during market anomalies. While the compensation plan addresses immediate concerns, the incident highlights the need for:
- More robust risk management systems
- Clearer communication protocols during crises
- Comprehensive protection mechanisms for leveraged products
The crypto community will continue monitoring how exchanges balance innovation with risk mitigation as the industry matures.