Huobi's BitVC Takes Trader Profit to Cover $1 Million Loss

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BitVC, the digital currency futures trading platform owned by exchange Huobi, found itself on the receiving end of customer anger last week when it took 46.1% of traders' profits from the week to cover a "system loss" of over 3,000 BTC.

The loss raises questions about whether cryptocurrency exchange platforms have the liquidity to support sophisticated trading features such as margin lending and derivatives, and whether they are using the correct mechanisms to deal with unusual events.

It also highlights how bitcoin's price volatility can bring surprises in a world of highly leveraged trading and the 'socialized' sharing of losses between trading winners.

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