Xinqiao Capital Suffers Unexpected Forced Liquidation in Gold Trading; Hong Kong Office Now Deserted

TechFlow reports, on August 21, according to Caixin, that SBCFX experienced an abnormal liquidation event in London Gold trading. Following the incident, the company's Hong Kong office was left deserted, with some investors facing substantial losses. According to multiple investors, their automatic trading of London Gold (XAUUSD) derivatives via the SBCFX platform encountered extreme anomalies on the evening of August 19: the system generated massive reverse short positions within just one to three seconds. A subsequent rapid surge in global gold prices triggered mass account liquidations. Several accounts saw their balances drop to zero, while others even ended up with negative balances.

A London Gold liquidation refers to a scenario where a position moves opposite to the market trend. Driven by leverage and other factors, losses escalate rapidly, depleting the available margin and falling below the maintenance margin ratio. This prompts the platform to execute a forced liquidation, resulting in a total loss of principal. In this incident, numerous investors funded their SBCFX accounts using USDT stablecoins. Although this deposit method offers seamless transfers and instant settlement, it also conceals fund flows, making it difficult for regulators to trace transactions after the fact.

Public records show that SBCFX's business scope covers forex, commodities, indices, and cryptocurrencies. The firm publicly claims to operate as a licensed and compliant international trading platform.