A bankruptcy occurs when a user's account is forced liquidated due to a high account risk and the margin balance is still negative after the forced liquidation is completed.
In the classic mode, when the risk level of a currency in the futures account triggers a forced liquidation, the negative margin balance of the currency is the amount of bankruptcy.
In the unified margin (UM) mode, when the risk level of the account triggers a forced liquidation, if the account total margin balance is less than zero and the system detects that there is a currency with a margin balance greater than zero, it will perform another currency swap operation to convert the margin balance of that currency to the liability currency and pay off the liability before exiting the forced liquidation process. After this, if the total margin balance is still less than zero, the system will forfeit all small assets with a positive margin balance in the UM account, and the negative currency margin balance in the UM account is the bankruptcy amount.
BIT Insurance Fund
In order to minimize the risk of socializing caused by position bankruptcy, BIT has introduced BIT Insurance Fund. All bankruptcy losses on the platform will be paid by BIT Insurance Fund. When the balance of BIT Insurance Fund is sufficient, users will not be required to pay any additional compensation to the platform. When the balance of the insurance fund is insufficient, the shortfall loss will be shared by the users who have net profit on the day based on their profits.
Click here to view the balance of BIT Insurance Fund.