This update was shared by BitMex in a series of tweets a couple of minutes ago. Read the detail of the update below as shared by the exchange:
“We understand traders’ frustration when prices move quickly against their positions. However, we’ve investigated recent activity on our XRPUSD perp and our system performed as expected and prevented liquidations.
The Fair Price Marking method meant users (including some who may believe they were liquidated) avoided liquidation (no liquidations occurred on XRPUSD 14:00-14:02 UTC).
Stop Market orders set by users to trigger on the Last Price would have triggered due to this move, as designed. (For a refresher on our Fair Price Marking method see follow this link
Last Price-triggered stops are vulnerable to fast market moves. A Stop Market executes the whole order at the best available price. Stop Limits limit execution price, but may not fill the whole order; Fair or Index Price triggers aren’t directly affected by the Last Price.
No market can guarantee protection against sharp movements for all users under all circumstances. We pioneered the Fair Price Marking system and designed it to protect users from liquidation in this scenario. For stops, users may select which trigger to use at their discretion.
Our Insurance Fund is not intended for use here. It is used to guarantee profits by preventing the triggering of ADL (Automatic Deleveraging) in the event of unfilled liquidations.
If a user loses more margin than allocated to the position, and another user is owed those profits, the delta comes from the Insurance Fund. The Insurance Fund does not protect users from slippage on a market order.” BitMex Concluded.