Huobi to Replace the Clawback Mechanism with ADL for Coin-Margined Futures

Dear Huobi Users,

To provide our users with a better trading experience, Huobi has officially replaced the clawback mechanism with Auto-Deleveraging (ADL) for coin-margined perpetual and delivery futures contracts starting at 2:00 (UTC) on May 29, 2023.

The launch of the ADL mechanism will not affect the related trading functions of the coin-margined futures. You can still engage in coin-margined futures trading as usual.

Why is Auto-Deleveraging being adopted?

1. 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.

For more information, please refer to Auto-Deleveraging (ADL) Rules.

2. After the ADL mechanism is adopted, Huobi will fully revoke the clawback mechanism to ensure users' asset security.

Huobi remains committed to providing you with better products and services.

Huobi

May 29, 2023

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Huobi 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 Huobi makes no recommendations or guarantees in respect of any virtual asset, product, or promotion on Huobi. Prices of virtual assets are highly volatile and trading virtual assets involves risk. Please read our Risk Reminder text here.