"Virtual currency" derivatives trading mystery: whose angel? Whose Satan?

Zhang Yingxin

From faith to air, is it the result of eating greed or misunderstanding? The myth of making money in the currency circle is still spreading among individual investors.

"Staring at the abyss for too long, the abyss will return to gaze." For hundreds of investors who suffered a futures contract explosion on the "virtual currency" exchange OKEx, the "abyss" may not have been a gaze, but a real abyss. What is the result? No one can give an answer.

If it is not for the "saw-saw war" between users and exchanges, few people have noticed that derivatives trading with small and large "virtual currency" has not only realized the explosion of scale, but also buried the risk sparks that ordinary individual investors can not bear.

This is not the "gamble" they can play. Obviously, when individual investors realize that it is too late to get into the puzzle.

A close regulator told the Economic Observer that virtual currency futures and their derivatives were not approved by the regulatory authorities in China and that investing in such "products" was strictly not protected by law.

From belief to "air"

This is the second time that 35-year-old Wang Lin has come to Beijing in the last month. He did not realize that the distance between the two trips was not long, but the temperature difference could be so big. Wang Lin's nose was red with cold, but still rushing around in the gale. If it hadn't been for the post-90s younger brother's "virtual currency" contract to burst, he should be sunning in Chengdu now.

Wang Lin's brother works in an ordinary Internet company. At the beginning of this year, because he saw a lot of content about "virtual money" in the network and the circle of Wechat friends. Although he was not sure what it was, Wang Lin's brother still couldn't help "testing the water" and took out 400,000 yuan of his family to buy classes on OKEx platform. Futures contract products.

"Virtual currency" futures are mainly traded by leveraging a certain proportion of margin on a small scale. According to OKEx platform rules, users can choose 10 times and 20 times of leveraged transactions, which also means that once they buy the wrong direction, if the position is insufficient, they may burst at any time. At the same time, due to the lack of supervision, bankers can not carry out manipulation in the traditional securities market, which can be "implemented" in the currency circle. Ordinary individual investors are easily "bloody washed". And the sudden "downtime" of the exchange from time to time makes it more difficult for ordinary individual investors to accept the losses caused by the bursting of positions.

In April this year, shortly after the purchase of contract products, the prices of the mainstream "virtual currency" currencies such as Bitcoin and EOS fell, and Wang Lin, who chose to be long, began to add margins to avoid a burst. But it was not expected that the whole OKEx system was "paralyzed", the web page could not be opened properly, and the APP could not be logged in. This situation lasted about an hour. Due to the inability to close or replenish the warehouse, Wang Lin's brother watched his 400,000 yuan drift, while OKEx's burst prompt text message "came late" two hours later.

There are not a few people who have the same experience with Wang Lin's younger brother. Many people have suffered losses in the downtime of OKEx system, which they collectively call OKEx's "pull-out" behavior. An investor from Zhuhai disclosed that after losing money in purchasing spot products, he gradually acquired nearly 2 million yuan of capital through credit card cash, online lending platform and borrowing money from relatives and friends. He made several replenishments in succession through highly leveraged transactions, and eventually he was not "rich", but was in debt.

According to the incomplete statistics of reporters from the Economic Observer, in the group of "individual investors" in the Wechat, the amount of loss is from hundreds of thousands to tens of millions of yuan, or even more than 100 million yuan. A trading screenshot provided by a Southwest investor to reporters shows that in August this year, his nearly 2.8 million EOS coins were leveled, with the commission price of 29.15 yuan. As of press release, EOS has a current price of about $5.53, which is estimated to be over 100 billion yuan.

"I personally used to make some investments in block chain technology and virtual currency projects. The normal loss is acceptable. I started to build warehouses continuously in May and chose 10 times leverage. However, in mid-August, a week before the bursting of the warehouse, the rules of the platform suddenly changed, and we were unable to add margins. At that time, I wanted to continue to increase warehouses to reduce the average price to reduce the risk of being exploded, but that would be estimated to have been'targeted', the explosion of warehouses became a foregone conclusion. The investor believes that unlike other relatively small amounts of individual investors who are experiencing "pull-out" situations, their millions of EOS coins are "fixed-point burst".

After encountering the above situation, users said they would communicate with OKEx customer service personnel, who said they would compensate. But in the end, the user has not received any compensation plan. In addition, some users told reporters that after giving official feedback to OKEx, the transaction data in their accounts were forcibly deleted and can not be viewed at present.

According to OKEx's official microblog, its accreditation subject is Beijing Beacon Fire Creative Technology Co., Ltd. (hereinafter referred to as "Beacon Fire Creative Excellence"). According to industrial and commercial data, Fenghuo Chuangjie was founded on May 5, 2016 with registered capital of 5 million RMB. The natural shareholders are Zhang Hao (56% of the shares) and Wang Ying (44% of the shares), among which Zhang Hao is also the legal representative.

Public information shows that Xu Mingxing is the founder of OKEx. However, this year, Xu Xing said in an interview with the media: "I am not a legal person of OKEx, nor its shareholders, directors, OKEx is a Maltese company, which is very clear." According to OKEx insiders, Xu Xing is no longer involved in the company's operations and other work, but there is a historical link.

In an interview with the Economic Observer, Li Zhikai, director of OKEx Financial Markets, pointed out that the sudden flow exceeded the OKEx team's historical expectations of carrying capacity. Although it has been constantly upgraded and expanded, it always breaks the carrying capacity at that moment. No company can promise that its platform can guarantee 100% of the availability of traffic bursts.

"Platform can not participate in any transaction." But Li Zhikai also admitted that it is really difficult for the exchange to prove its innocence, and there is no authoritative third party to evaluate the industry at this stage. He stressed that OKEx did not commit any compensation to users.

Should OKEx be responsible for the explosion caused by system downtime? Some currency circle practitioners believe that the exchange is a trading occasion, investors should be responsible for their own profits and losses; but some practitioners are frank, after all, this is not Taobao "double eleven", landing is not the most delay in payment. What's more, the investors should pay a certain fee if they pay the fees.

"When the global market plummets, it's inevitable for buyers to lose money. It's also the basic rule of trading. The profit and loss of trading is not caused by Carton at all." Li Zhikai admits that OKEx needs to make users more aware of price fluctuations and risk of position setting, etc. in the future, and will continue to upgrade and expand the carrying capacity of the system.

In addition, according to Li Zhikai, in order to strengthen market wind control, OKEx in mid-August on-line limit rules, the goal is to mitigate the impact of large warehouse burst on the market, and leave enough time to notify customers to adjust strategies. When customers think the risk is too high, they can reduce the actual leverage through margin or margin reduction.

Can investors protect their rights through legitimate channels? Wang Deyi, a lawyer at Beijing Truth-seeking Law Firm, believes that for investors, they must first find OKEx's agent or authorized agency in China to claim civil rights. "Evidence can be gathered to bring civil action to the person in charge of the platform and the actual controller. If the platform operates an unlicensed transaction, all the transactions that investors have participated in should be deemed invalid, and the platform should bear the responsibility of returning after the transaction is invalid. If the platform unilaterally closes the right of landing the customer account, the platform can not effectively prove the reason and rationality of the change of the customer account rights and interests, and the property of investors. The infringement of rights constitutes a corresponding civil liability. Wang Deyi said.

Whose angel? Whose Satan?

Wang Lin said, in fact, the loss of 400 thousand yuan is within the acceptable range. "On the one hand, I want to communicate with OKEx people face to face to see if I can get the compensation promised before, but more importantly, I want to make more people not blindly believe the myth of money circle making rich, especially young people, through legal means such as law."

Under the lure of the myth of wealth creation, more and more young people are rushing to enter the currency circle. Some people believe that this is a career, while others firmly believe that this is an opportunity to change their destiny. But all the gifts of fate mark the price in secret.

Liu Qi, who runs a small business in Fujian Province, bought a certain amount of bitcoin through a friend's introduction in January this year, earning nearly one million yuan. After seeing the promotion of OKEx's contract product "Transaction Delivers Tesla" (the lowest USDT, the highest Tesla), OKEx joined in decisively and became an "Expeditionary Force" of OKEx. The main responsibility of the Expeditionary Army is to popularize the common sense of "virtual currency" in the core users'Wechat group and help users solve problems, such as how to complete registration and how to purchase. Of course, their more important task is to wipe out the voice against OKEx in the Wechat group and brainwash users. "At first, I managed 4 to 5 Weixin groups. Every day, I enjoyed answering all kinds of questions in the group. For the first time, I realized the beliefs of people in the circle." But in the end, Liu Qi's belief was shattered by the reality of the explosion and turned into "air".

Faith breaks down not only Liu Qi, who trades on OKEx platform, but also Liu Qi, a private investor, who reported to reporters that he had suffered a huge loss on other "virtual currency" derivatives trading platforms. This, in fact, also reflects to a certain extent the current situation and risks of the whole "virtual currency" derivatives market.

According to the definition of financial derivatives, it refers to a financial contract signed by buyers and sellers or parties whose value derives from one or more basic assets or indices. The basic types of contracts include forward, futures, swap (SWAP) and options. Such contracts can be standardized or non standardized.

Standardized contracts refer to the transaction price, transaction time, asset characteristics and transaction mode of the underlying assets, which are pre-standardized. Therefore, most of these contracts are listed on exchanges, such as futures. Non-standardized contracts (i.e. over-the-counter derivatives) refer to the above-mentioned agreements made by both sides of the transaction, so they have strong flexibility. "Virtual currency derivatives and financial derivatives are essentially the same, but the subject matter has become some mainstream'virtual currency'currencies, such as Bitcoin, ETF and so on." Lou Jiyue, founder of Tokenmania Digital Asset Management Company, told reporters that at present, the exchanges in the field of "virtual currency" derivatives trading are bigger, including BitMEX (UK), OKEx and so on. Most of the platforms in the market mainly involve "virtual currency" derivatives business, including futures, options and sustainable contracts. According to Lou Ji Yue, Tokenmania involves large trading.

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