Trading of DTA, ONT, BTM and IOST on Huobi Pro fluctuated sharply at around 14:00 on May 12th, 2018 (GMT+8) and resulted in liquidation of some user accounts. Huobi has conducted an in-depth investigation into this issue.
Huobi Pro has been using “liquidation circuit breaker” in our margin trade. When the price of a coin at Huobi Pro deviates other global mainstream trading platforms and the weighted average price of reaches 15% (set up by the system), this breaker will take effect and the liquidation will not be triggered.
However, Huobi Pro’s market share of the above coins was too large in this event, and the global weighted average price was dominated by the price at Huobi Pro. As a result, the risk control models of these coins didn’t function effectively, and the “circuit breaker” was only triggered partially. We have defined this situation as an "incident" and taken the following measures for improvement:
1. We have already suspended the new loaning service of ELA, RUFF, NAS and DTA. Users who hold loans of these coins are kindly requested to control the risks.
2. To further protect our users, we have narrowed down the previous deviation range from 15% to 10% which triggers the “liquidation circuit breaker”.
Upholding the principle of "prioritizing users’ interests", Huobi Pro is not liable for any compensation for losses caused by users’ improper judgement in their investment; but for the non-force majeure incidents caused by Huobi, we will provide compensation with our Investor Protection Fund. This practice is our long-standing principle and tradition.
Conditions for payment of the loss:
1. At the time of liquidation, if the price of Huobi Pro deviates from the average price of the other markets by more than 15%, we define it as "unreasonable price". If the liquidation circuit breaker fails at this time, the maintenance margin will be paid back to you.
2. The amount of payment shall be in the currency in which you traded.
3. Maintenance margin paid = liquidation amount - loan total / closing price of the day - net value after liquidation / closing price of the day.
If the DTA/USDT pair, James’s 100,000 DTA went to liquidation at the price of $0.010, and the trading total is 1,000 USDT. After the liquidation, the loan of 950 USDT is repaid, and 50 USDTT is left. The closing price of May 12th is $0.020.
The maintenance margin paid is 100,000-950 / 0.020-50 / 0.020 = 50,000 DTA.
Users who meet the criteria may send an email to the firstname.lastname@example.org before 24:00 (GMT+8) on May 21, with the title: 512 liquidation compensation + UID. The text should be filled out as follows:
1. Your name, mobile phone number, and Huobi Pro UID;
2. The name, amount, total of maintenance margin at the time of purchase, and the price of the currency;
3. The currency’s prices on Huobi Pro, Binance and Okex at the time of liquidation;
4. The amount of loans you repaid after the liquidation and the amount of your lost maintenance margin;
We will pay you within 5 working days. Please wait patiently.
May 17 2018