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https://www.bitmex.com/app/insuranceFund https://www.bitmex.com/app/insuranceFund And cascading margin calls are possible, but it seems like all exchanges exce

• JumpCrisscross 9y ago
  > https://www.bitmex.com/app/insuranceFund https://www.bitmex.com/app/insuranceFund That isn't an insurance fund. It's BitMEX's reserves, re-branded. In the event of a crash the value of these assets would fall. If the price drop is large enough, it could burn through these reserves. It is prudent that BitMEX seems to be holding reserves. This is what good exchanges do! But consider why Goldman Sachs is requiring 100% margin while Bitfinex is doing the same at 30% [1]. The additional risk is borne by the exchange's (or in GS's case, broker's) equity. When that runs out, the exchange (or broker, as applicable) busts. We separated broker-dealers, who can lend on margin, from the exchanges in the equity markets for a reason. > it seems like all exchanges except for gdax/coinbase have a strategy to handle it Based on what? [1] https://support.bitfinex.com/hc/en-us/articles/115004555165-Intro-to-Margin-Trading https://support.bitfinex.com/hc/en-us/articles/115004555165-...