BitMEX introduces restrictions to protect users from errors

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From February 16, the cryptocurrency derivatives exchange BitMEX will introduce a “rule for trading with protection against input errors.” The platform will limit the opening of positions that differ from the market price by 5% or more.

Market and limit orders will be capped at the so-called Impact Price:

  • Buy orders – by a value 5% higher than the Best Ask or Mark Price, whichever is higher.
  • Sell ​​Orders – by a value 5% below the Best Bid or Marking Price (whichever is lower).

If the size of a market order is less than or equal to the accumulated size of orders in the order book (up to the maximum significant price), then the requested order will be fully executed.

If the order size is larger than the accumulated size of available orders, the order will be executed only up to the maximum significant price, and the rest of the order will be canceled.

“While these types of errors are rare, they can cause dramatic price fluctuations,” says the exchange’s blog. “The mechanism protects not only the trader who placed the order from sudden price shocks, but also other users.”

Some Twitter regulars have criticized BitMEX’s decision.

According to them, “the fat finger mistake is part of the game,” and eliminating it will lead to the loss of clients.

In May 2020, The Bitcoin Manipulation Abatement LLC (BMA) filed a lawsuit against BitMEX on charges of manipulating the cryptocurrency market.

In October, the exchange received a lawsuit from the United States Futures Trading Commission for managing an unregistered trading platform and violating CFTC rules in terms of conducting KYC / AML procedures.

In November, BitMEX was accused of withdrawing more than $ 400 million after receiving information about an ongoing investigation.

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