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BitMEX Insurance Fund – What is this? Pros and Cons

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BitMEX insurance fund is marketed by the company as a tool to “help ensure winners receive their expected profits, while still limiting the downside liability for losing traders.”

BitMEX insurance fund is a feature not so common among trading platforms, and these kinds of functions make a difference between market leader and those not so successful.

Despite the fact that cryptocurrencies still have a relatively juvenile market, since the large breakout of 2017, some leaders have been established among crypto trading platforms. These are institutions that have successfully managed to overcome baby steps and offer their clients something more than usual.

One such platform is BitMEX. So, let’s dive into explaining their insurance fund and how it functions.

What is BitMEX?

The official website simply states that “BitMEX is a trading platform that offers investors access to the global financial markets using only Bitcoin,” and this is a thing that differentiates BitMEX from other trading platforms. However, it is not the only one.

BitMex offers its users a variety of other options which others do not.

From perpetual, leveraged swap contracts, across a variety of leverage options and many different kinds of trading contracts, to UP and DOWN trading options and Futures, BitMEX has taken crypto trading to another level.

Furthermore, their users have an insurance fund, which is the main topic of this article, so let’s dive into explaining what it actually is and how it functions.

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What is an insurance fund?

In terms of trading, an insurance fund can be defined as a protective tool that shields from a trading contract loss. For example, let’s say that liquidation of the contract happens, and when the execution price is lower than the bankruptcy price, the insurance fund will be used to cover for the losses.

What is BitMEX insurance fund?

BitMEX insurance fund is marketed by the company as a tool to “help ensure winners receive their expected profits, while still limiting the downside liability for losing traders.”

What that means is that when a trader opens a  leveraged position and their maintenance margin is too low, their position gets liquidated and there is an insurance fund, currently stated to be worth around 21,000 Bitcoin (BTC) ensuring that a trader doesn’t end up in debt.

However, BitMEX insurance fund doesn’t work exactly like its counterparts in traditional markets. Once the trader gets liquidated after opening a position with leverage on BitMEX, his equity related to the position always goes down to zero.

Here is how it actually works:

Say that the trader has:

  • 100x long position
  • 1 BTC
  • price at the opening $9000

If the price of Bitcoin falls by 0.5% (to $8,550) the contract gets liquidated. Now, the 100 BTC position needs to be sold on the market. A trader that got liquidated has no consequence what the price of that transaction will be since he lost one Bitcoin in any case.

Therefore, we can say that BitMEX insurance serves more to ensure that winning traders get what they traded for than to ensure the losing party financial security. What BitMEX will do for the losing trader is that they have other mechanisms that ensure that the trader’s balance can’t go below zero.

Still, BitMEX warns that considering that the insurance fund is capped, an occurrence where there aren’t enough funds to cover all the winners’ gains is possible.

Do all trading platforms have an insurance fund?

Insurance funds are still not common among cryptocurrency trading platforms because simply put, these institutions are still not as powerful as the traditional exchanges. This also happens because of the very nature of the underlying assets.

However, some BItMEX competitors, like Deribit or OKEx do offer the same solution.

Should I trade on BitMEX? Pros and Cons

Pros

  • High leverage
  • Insurance fund
  • Liquidity
  • Lots of different products
  • No deposit/withdrawal fees
  • BitMEX Testnet

Cons

  • A high degree of knowledge needed to use the platform
  • Trading in BTC exclusively

Start Trading with BitMEX

If you found what you were looking for in our What is BitMEX insurance fund article, you may also be interested in reading What is BitMEX Testnet and How to Short Bitcoin.

The post BitMEX Insurance Fund – What is this? Pros and Cons appeared first on Cryptocointrade.

Source: https://www.cryptocointrade.com/crypto-trading-blog/what-is-bitmex-insurance-fund/?utm_source=rss&utm_medium=rss&utm_campaign=what-is-bitmex-insurance-fund

Blockchain

A South Korean court dismisses a lawsuit brought by Bithumb investor over a data breach.

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A South Korean court dismisses a lawsuit brought by Bithumb investor over a data breach. – Coinnounce




























A South Korean court denied relief to an investor who claims to have lost some $400,000 due to the negligence of cryptocurrency exchange Bithumb.

According to the Yonhap news agency report, the investor, known as Mr. A, had taken Bithumb to court in connection with the losses, which he alleges were the result of a significant data breach at the exchange back in 2017. However, a judge in the high court refused the case and dismissed liability after Mr. A failed to sufficiently prove that the exchange’s negligence had caused his losses. Following the ruling, the crypto exchange will not be required to compensate Mr. A. Crypto news aggregator platforms like cryptopanic can help you keep up with the crypto industry. 

The losses were from the data breach prior to 2017. 

According to the plaintiff, the losses came from Korean won stored on the exchange prior to a data breach in 2017. Hackers had allegedly gained unlawful access to the won and bought Ethereum tokens with it through the Bithumb exchange, before converting these back into fiat at four separate intervals. The case against the South Korean exchange was only the latest to have been raised by investors concerned about losses emerging after the 2017 data breach. This month, two of these claims were dismissed for $126,000 and $38,000, respectively, while a third was awarded just $5,000 in a partial settlement.

South Korean court had ordered to seize investors’ shares of Bithumb. 

South Korea’s leading cryptocurrency exchange Bithumb came under inspection of Seoul Police due to certain accusations earlier this year. The chairman of Bithumb was found defrauding Bithumb’s customers by fooling them into buying fake tokens. Bithumb was accused of dumping its customers by selling an unlisted token. Bithumb has been a hot topic among the crypto community as it was the second cryptocurrency exchange to come under police scrutiny. The Seoul Central District Court passed an order to seize Bithumb investors’ share last month. 

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Jai Pratap

Jai Pratap

A Mass Media Graduate who loves to write. Jai is also a sports enthusiast and a big movie buff. He loves to learn new things.


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Source: https://coinnounce.com/bithumb-investor-lawsuit-was-dismissed-in-south-korea/

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Australian Securities Exchange to triple capacity of DLT system

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The Australian Securities Exchange will delay its blockchain-based CHESS replacement after huge trading volumes due to the pandemic required a massive expansion of capacity. The DLT- based system had been scheduled for official trials in December, with a planned launch window of early 2022.

At its annual meeting this year, ASX chief executive Dominic Stevens told shareholders they were looking to triple the capacity of its planned DLT system based on the surge in trade volumes seen earlier in March.

He also said that the firm was looking into how much further the timeline needed to be extended to accommodate “demand for significant additional capacity and functionality from the day it goes live.”

The blockchain-based clearance system to replace CHESS was originally planned for launch in April 2022, with official trials scheduled for December this year.

The ASX has been working on the CHESS-replacement for the last four years, which has become the subject of much debate.

Last year, the CHESS Replacement Stakeholder Group, a group of financial market firms consisting of over 6 million “mum and dad investors,” raised concerns about the ASX’s potential to entrench its monopoly position. According to the CRSG, the integration of the DLT system could lead to hampering competition in key market segments, “damaging, or even threatening the long-term survival of brokers, share registries, and other stakeholders.”

ASX chairman Rick Holliday-Smith claims that the DLT platform will open up new paths for competition, and make clearance and settlement much simpler for market participants. 

Source: https://cointelegraph.com/news/australian-securities-exchange-to-triple-capacity-of-dlt-system

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Leader That Allowed Scams: TRON’s Justin Sun Responds to Claims by Ex-Employees

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Yesterday The Verge published an elaborate article portraying a picture of Justin Sun’s leadership at BitTorrent post the peer-to-peer file-sharing site’s acquisition by the TRON foundation.

Sun later responded to the ‘false-claims’ made by TRON/BitTorrent’s ex-employees in the article with ‘An Open Letter to Anyone Who Cares to Read’ on Medium.

Claim: Megalomaniac Leader; Response: True Libertarian

In the supposedly expose piece, author

Refuting the above portrayal of his leadership, Sun, in his response, stated that he has devoted his entire life ‘to being a responsible, global citizen’. Adding to this, Justin said that is a true champion of libertarian principles for a significant portion of his life.

I have devoted myself to being a responsible, global citizen throughout my entire life, spending significant portions of my personal and professional life to activities promoting universal values of respect, liberty, equality, and kindness.

The TRON and BitTorrent chief impressed further on his ‘global’ approach to things. He explained that the TRON Foundation harbors a ‘global team of talented contributors and developers’. And that he takes ‘pride in working’ with this global community to make TRON ‘one of the greatest decentralized blockchain protocols’.

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Claim: Freedom Suppressor; Response: Upholder Of Human Rights, Individual Values

Dunaway reportedly engaged in conversations with folks who are/were associated with the TRON brand and the work culture. From what he gathered, Justin enforced a draconian company culture, with employees officially following the ‘9-9-6’ norm.

According to the article, TRON’s HR had Slack replaced with its Chinese counterpart DingTalk. The communication platform had an in-built surveillance mechanism that would use ‘Apple Health to count people’s steps’. Also, DingTalk used to ping employees literally all the time.

To this, Sun responded by saying that he has left no stone turned in, establishing a work culture that respects.

diversity and individuality through a culture that cherishes fundamental human values freedom of speech, user privacy, intellectual property protection, kindness, a diversified working environment, and compliance with legal standards.

Justin went on to comment that TRON and BitTorrent operate with a ‘globally collaborative team’. One that upholds and respects the ethos of cross-culture teams. Sun claimed that the folks at TRON folks have ‘worked hard’ to create a collaborative work culture. One that values freedom of speech and individual privacy.

Claim: Suppressed Criticism, Allowed Scams; Response: No Control Over Protocol Functioning

The Verge piece mentioned that ‘decentralization’ was just a facade for what was happening behind the curtains. Justin Sun and his core officials exercised strict control over content moving about and within the TRON network.

This involved allegedly paying a Redditor to ‘erase negative posts’. Which later drew the ire of the community.

Free speech is part of the ideology of decentralization, where ideas flow without gatekeepers. Tron started deleting any post it wanted.

The article also claimed that TRON’s administration team was silent and allowed the perpetration of scams on the network. While this happened, scammers and the scammed continue to grow in numbers while the management did nothing to interfere.

Justin, in his Medium post, said that he and the entire TRON administration team function sans control. Even though the team at TRON works to upgrade the platform, they do not exercise any censorship/regulation.

…we have no control or discretion over what applications use the protocol, what data is transmitted, or how its community members use it.

Sun went to add that he and his team are proud of TRON and BitTorrent’s achievement over the years. He went to quote that both have collectively ‘served 2 billion users around the world. These include ‘numerous enterprises, universities, and governments’.

Lastly, the TRON and BitTorrent boss struck down all claims made by ex-employees Lucasz Juraszek, Richard Hall, and Cong Li. Justin declared that the TRON foundation’s legal counsel has submitted all the requisite proofs and evidence pieces to the court. “We believe the decision will speak for itself”, he said.

BTT and TRX’s price didn’t seem to undergo any correction following the release of the bitterly scathing Verge piece. On the contrary, BTT is actually up 2.3% in the last 24 hours.

Featured image courtesy of QZ.com

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Source: https://cryptopotato.com/megalomaniac-leader-that-allowed-scams-trons-justin-sun-responds-to-claims-by-ex-employees/

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