OKX announcement regarding the BCH fork event

Dear OKX users,

The Bitcoin Cash (BCH) network is expected to undergo a hard fork on Nov. 15, 2020. There are currently two competing fork proposals, Bitcoin Cash ABC (BCH ABC) and Bitcoin Cash Node (BCHN). In the event of a successful fork, OKX users holding BCH prior to the fork will receive the two new assets, BCH ABC and BCHN.

Our platform's preparation for the fork and the new assets will be along the following timeline:

1. Spot and margin trading

1) At 3:00 am UTC on Nov. 8, the BCH margin lending function will be suspended.
2) Users who have borrowed coins from BCH/USDT and BCH/BTC pairs in margin trading (including borrowing BCH, USDT, and BTC currency pairs),are required to return the coins before 3:00 am UTC on Nov. 14. At that time, a mandatory repayment will be triggered by the system for loans that are not returned.
3) At 9:00 am UTC on Nov. 14, spot and margin trading services will be suspended and all market orders will be canceled.
4) At 10:00 am UTC on Nov. 14, the deposit function will be suspended. Please deposit BCH in advance for OKX to handle any technical issues during the fork.

2. Futures and perpetual swap

1) BCH contracts' underlying asset
The underlying asset for the BCHUSD and BCHUSDT futures and perpetual contracts on the OKX platform is the pre-fork Bitcoin Cash (BCH). These markets will continue trading during the fork, and the contract name will not change. After the fork is completed, the underlying asset will follow one of the forks.
In principle, the underlying asset of the post-fork contracts will be the more expensive post-fork asset, determined by the post-fork spot market on various major crypto exchanges.
2) Underlying index components at different stages of the process and the corresponding risk-control adjustments
A) The current components of the BCHUSD and BCHUSDT indexes are as follows:

BCHUSD

BCHUSDT

B) The current index component exchanges may delist BCH-related currency pairs prior to the fork, resulting in fewer contract index components (<=2), or even no spot market components. If this occurs prior to the fork, we will adjust the risk-control rules to ensure the stable operation of the contract market as follows:

a) The contract price limit will be calculated according to the following rules:
i) Futures: maximum buy price = contract k-line average price of last minute *(1+ 15%); minimum sell price = contract k-line average price of last minute *(1- 15%).
ii) Perpetual swap: maximum buy price = contract k-line average price of last minute *(1+ 15%); minimum sell price = contract k-line average price of last minute *(1-15%).
iii) Contract k-line average price of last minute = (open price of last minute + closing price of last minute)/2.
b) The liquidation trigger will be adjusted from the mark price calculation to the contract mid-price calculation:
Contract middle price = (contract best bid price + contract best offer price)/2.
c) One day before the fork, or when there is no spot index component, the upper and lower limit of the perpetual funding fee will be adjusted to 0, and no funding fee will be collected during this period.

C) After the fork is completed, multiple exchanges may list spot trading pairs. We will select the chain with a higher price as the underlying asset for the contracts and add it to the BCH contract index component. After the index component stabilizes, the risk-control logic will revert to its default state. To ensure we can build the index as soon as possible, we will follow the exchanges closely, and we may adjust index components as soon as possible without announcement.

3) Tiered maintenance margin system

Before and after the fork, the market may experience higher than usual volatility, and the adjustment period of index components may also cause relatively large changes in contract prices. Therefore, we will gradually adjust the BCH contract's tiered maintenance margin ratio in the near future, reducing the maximum leverage of the BCH contract, and increasing the maintenance margin ratio under different tiers of the BCH contract to reduce the risk of clawback.

4) New tenure BCH futures listing halted

In order to prevent settlement risks during the fork, there will be no new BCH weekly and bi-weekly contract listings before Nov. 15.

We will notify users in advance via official announcements to reduce the impact on transactions in regard to the above-mentioned index component and risk-control rule adjustments. In addition, because the market may fluctuate wildly during the fork process, users are advised to make a full assessment of the risks caused by market fluctuations, rule adjustments and large market clawback in order to avoid unexpected losses.

C2C Trading

The BCH C2C trading will be suspended at 3:00 am UTC on Nov. 8.

Financial Services

1) Savings
After the BCH margin lending function is suspended, customers who use our Savings product can still receive the corresponding deposit interest based on the remaining borrowing balance of the platform. Users don’t need to redeem the assets in their savings accounts, as OKX will handle the technical issues relating to the fork.

2) C2C lending
The C2C lending service with BCH as collateral will be suspended at 3:00 am UTC on Nov. 8. Users who borrow USDT with BCH as collateral must repay their loans before 3:00 am UTC on Nov. 14, when a mandatory repayment will be triggered.

Forked asset

1) From 1:00 pm to 1:05 pm UTC on Nov. 15, the system will take a snapshot of the total BCH equity in users' OKX accounts. The snapshot will last five minutes due to the large number of BCH holders.
2) After the fork is completed, we will refer to the trading prices of the forked currency pairs on major exchanges and select the chain with the higher price to inherit the BCH name. The tokens of the other chain will be airdropped to users' funding accounts at a 1:1 ratio. The new BCH coins will still be kept in the users' accounts, while the airdropped assets can be found via Assets > My assets > Funding Account.  Airdrop data will be determined based on the BCH snapshot taken between 1:00 pm and 1:05 pm UTC on Nov. 15.
3) After the fork is successfully completed, OKX will separately announce the deposit time in regard to the new BCH and forked tokens, as well as the opening time of the spot and margin trading services.

Risk Warning: Trading digital assets involves significant risk and can result in the loss of your invested capital. You should ensure that you fully understand the risk involved and take into consideration your level of experience, investment objectives and seek independent financial advice if necessary.

Thank you for your continued support and we assure you our best services at all times.

Regards,

OKX
October 28,2020 (UTC)

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