Dear HTX Users,

HTX will be replacing the clawback mechanism for USDT-Margined Futures with the Auto-Deleveraging (ADL) mechanism, effective 10:00 (UTC) on November 9, 2022.

Why is the ADL mechanism adopted?

a. ADL has been a mainstream mechanism to manage platform-level risks. Compared with the clawback mechanism, it is more beneficial to users.

As a mechanism of liquidating counterparty positions to minimize the platform's overall risk, ADL is only carried out in the event of depletion or rapid drawdown of the insurance fund, which may occur due to extreme market conditions or force majeure. Unlike the clawback mechanism that affects the trades of all users with profits, the ADL mechanism only affects some users with profits.

Please refer to 【Auto-Deleveraging (ADL) Rules】 document for more information.

b. After the ADL mechanism is adopted, HTX will fully retire the clawback mechanism to ensure users' asset security.

c. ADL is a rare event. HTX will prioritize the use of the insurance fund for users at risk of negative equity. According to our review, ADL events only occurred once last year.

Thank you for your support.

HTX

November 9, 2022

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HTX reserves the right in its sole discretion to amend or change or cancel this announcement at any time and for any reasons without prior notice. The above is for information purposes only and HTX makes no recommendations or guarantees in respect of any virtual asset, product, or promotion on HTX. Prices of virtual assets are highly volatile and trading virtual assets involves risk. Please read our Risk Reminder text here.