Bitcoin (BTC) derivatives exchange BitMEX continues to criticize after attempting to declare a massive liquidation event where BTC / USD crashed 60%.
In a blog post on March 23, BitMEX addressed what it says “some questions” from traders since the event took place eleven days ago.
At the time, BitMEX seemed to suffer from what several sources have called a cascading margin call, forcing traders to plunge Bitcoin’s price. The stock market went offline for about half an hour, after which the price recovered.
After fighting off cheating claims, BitMEX still got questions about why its giant insurance fund – a bank of over 35,000 BTC ($ 205.6 million) – was not used to help.
The blog post explains its role, stating that the primary objective of the fund has always remained the same: to prevent automatic deleveraging (ADL) from successful traders’ positions to avoid the bankruptcy of positions being liquidated.
“It is important that the Fund be large enough to absorb intraday shocks to avoid ADL on the platform,” it summarizes.
Not everyone was convinced. Responding to the post, Twitter trader lowstrife posed questions about BitMEX’s modus operandi.
“The main question I am asking here is why, when the worst-case scenario almost happened, the insurance fund was barely used,” he said.
“Which raises questions why it is so big and its overall efficacy. Here we come to the limits of my knowledge and opinion.”
According to Skew data, there was the highest number of liquidations in BitMEX history on March 12 with 876 million. The next day saw the second highest at $ 798 million.