Cryptocurrency exchange OKX is investigating a sudden 50% decline in the value of its native token, OKB, prompting concerns about its stability. OKX CEO Star Xu assured users of an ongoing investigation but didn’t provide specifics.
The decline, from $52.4 to $25.1 in 15 minutes, prompted concerns about OKB’s stability. Analysis revealed a deposit of $8 million to OKX from dormant addresses a week before the incident, deeming it “suspicious.”
OKX responded by acknowledging the crash and introducing a compensation plan. The drop triggered liquidations and market impact, leading to a rapid decline. OKX plans to enhance risk control and liquidation mechanisms to prevent future issues.
The token’s recent recovery, with a 2100% increase in trading volume to $80 million, fueled optimism. OKX pledges full compensation for abnormal liquidation losses, with details to be announced in 72 hours.
Flash crashes are common in crypto markets, often due to thin liquidity. OKX’s global influence is expanding, with regulatory compliance efforts, while competitors like Bybit gain market share over Binance. As of now, OKB trades at $47, down over 10% from the previous day.
The abrupt decline in OKB’s value and OKX’s subsequent compensation plan raise concerns about the overall stability of the cryptocurrency, underscoring the need for improved risk management in the crypto market.
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