Trade.xyz announced it will cover liquidation losses caused by a sudden 18.7% drop in SK Hynix's mark price at 23:01 UTC on July 27. This sharp decline triggered forced liquidations on leveraged long positions, stemming from a pricing anomaly during South Korea’s NextTrade pre-market session.
At the heart of the problem was a single SK Hynix share trading at 1.272 million won nearly 30% below its previous close of 1.816 million won before quickly rebounding within minutes as buy orders flooded in. Market analysts pointed to thin liquidity and a possible order mistake as the key drivers behind this erratic price, amplified by NextTrade’s continuous matching system that set an executable price before enough orders arrived.
Trade.xyz described its reimbursement decision as a one-off discretionary move, emphasizing it is not a commitment to cover losses from future market disruptions. The company has yet to reveal the total amount to be compensated, criteria for eligibility, or the exact timeline for payout distribution. However, it promised to release eligibility rules soon and start payments in the coming days.
Details and Impact
The abnormal trade pushed the SK Hynix mark price from $1,127.90 down to $917.25, creating chaos for leveraged traders. While the regular Seoul market later closed with the stock down 14.65% at 1.55 million won, it was nowhere near the extreme dip seen in the pre-market session. SK Hynix’s Q2 earnings announcement on July 29 added another layer of fundamental news after the volatile pricing event.
According to Trade.xyz, multiple independent data providers relayed the questionable trade, and its oracle system was following established specifications. This incident highlights the challenges decentralized markets face when rare external pricing events collide with liquidity gaps.
This material is for informational purposes only and does not constitute financial advice.
