What Is the Insurance Fund in Crypto Futures?

The Insurance Fund is the exchange's reserve, managed by the clearing house Kliring Komoditi Indonesia (KKI), that protects the stability of the Crypto Futures trading system when a liquidated position can't fully cover its own loss. It is not Pluang's fund. It has two layers: a security deposit posted by each broker, kept segregated per broker, and a communal fund seeded by KKI and topped up from liquidation surpluses. When a liquidated position closes with funds remaining after covering its loss, that surplus goes to the fund instead of being returned to the trader who was liquidated. The fund then ensures the winning side of a trade still gets paid in full even if the losing side's position can't fully cover what it owes — a scenario that can happen when the market moves faster than the position could be closed. Auto-deleveraging (ADL) is used only as a last step, after both layers.

• Two layers: The fund combines a security deposit that each broker posts, kept segregated per broker, and a communal fund that KKI seeded and that grows from liquidation surpluses.
• How it's funded: Besides the broker deposits and KKI's initial contribution, every time a liquidated position is closed with funds remaining after covering its loss, that surplus flows into the communal fund instead of being returned to the liquidated trader.
• What it's used for: The fund acts as a backstop — if a position can't be closed in a way that fully covers what's owed to the profitable side of the trade, the Insurance Fund steps in to cover the shortfall so the counterparty is still paid.
• The exchange's fund, not Pluang's: The Insurance Fund belongs to the exchange and is managed by KKI. It isn't tied to your individual account — it's a shared safeguard that supports the overall stability of Crypto Futures trading, growing or shrinking with liquidation activity across all traders.
• Auto-deleveraging comes last: Without a reserve like this, a shortfall from one trader's liquidation could need to be absorbed from profitable traders' gains. Auto-deleveraging (ADL) is used only if a shortfall remains after both layers of the fund.

Related questions:

Q: Where does the money in the Insurance Fund come from?
From two sources: a security deposit posted by each broker, kept segregated per broker, and a communal fund that KKI seeded and that is topped up from liquidation surpluses — the funds left over when a liquidated position closes after covering its loss, which go to the fund rather than back to the trader. It builds up in the background without any action needed from traders.

Q: Does the Insurance Fund protect my individual position specifically?
Not directly — it's a shared reserve that protects the overall trading system, ensuring profitable traders get paid even if a counterparty's liquidation falls short. Your own liquidation risk still depends entirely on your leverage, margin, and margin mode; the fund doesn't change how close your own position sits to its liquidation price. Managing your own risk still requires the same discipline regardless of the fund's existence.

Q: What happens if a liquidation shortfall is larger than the Insurance Fund can cover?
This is rare. The exchange uses auto-deleveraging (ADL) only as a last step, after both layers of the fund — the broker security deposits and the communal fund — have been used. ADL is a further safeguard for extreme scenarios, not a routine occurrence.

Q: Can the Insurance Fund ever run out?
In theory a fund could be drawn down faster than it's replenished during an extreme, sustained market event affecting many positions at once. That's why the fund has two layers and why auto-deleveraging exists as a last step after both, rather than a single reserve being the only line of defense. Together they form the full safety net.