Exchange app didn't cancel orders and caused multiple fills of same order to fill leading to liquidation of cross margin account.. what can I do

Nov 10, 2024에 답변됨

If your exchange app didn't cancel orders and caused multiple fills leading to the liquidation of your cross margin account, you have several steps you can take to address the issue. Here's a concise guide to help you navigate this situation.

Understanding the Issue

Cross Margin Account Liquidation: In a cross margin account, all positions share the same margin balance. If the total unrealized losses cause the margin balance to fall below the maintenance margin, liquidation can occur, even if some positions are profitable (Binance FAQ).

Order Management: Orders can expire or be canceled by the system due to various reasons, such as market illiquidity or system conditions (Binance FAQ).

Steps to Take

1. Document Everything

  • Record Details: Note the time and date of the incident, the specific orders involved, and any error messages or notifications you received.
  • Screenshots: Take screenshots of your order history, account balance changes, and any relevant communications from the exchange.

2. Contact Customer Support

  • Submit a Ticket: Use the exchange's support system to report the issue. Provide all documented details and screenshots.
  • Follow Up: If you don't receive a timely response, follow up with additional information or escalate the issue through other support channels like social media or community forums.

3. Review Exchange Policies

  • Understand Terms: Review the exchange's terms of service and user agreements to understand their policies on order execution and liquidation.
  • Identify Breaches: Determine if the exchange violated any of its own policies or if there was a system malfunction.

4. Seek Compensation

  • Request Reimbursement: If the exchange acknowledges a system error, request compensation for your losses. This could be in the form of a refund or credit to your account.
  • Negotiate: Be prepared to negotiate the terms of any compensation offered.

5. Consider Legal Action

  • Consult a Lawyer: If the exchange refuses to address the issue, consult with a lawyer specializing in financial or cryptocurrency law.
  • Evaluate Costs: Consider the potential costs and benefits of legal action, including the likelihood of success and the amount of your losses.

6. Learn and Adapt

  • Risk Management: Implement better risk management strategies to protect against future issues, such as setting tighter stop-loss orders or using isolated margin accounts.
  • Stay Informed: Keep up with updates and changes to the exchange's platform and policies.

Conclusion

By taking these steps, you can address the issue of unwanted order fills and account liquidation. Documenting the incident, contacting support, and understanding your rights are crucial first steps. If necessary, seek legal advice to explore further options.