News by Coindesk: William Foxley
Poloniex is now crediting trading fees to lenders who lost funds in a May market crash involving the obscure cryptocurrency ClAMS.
According to an official blog posting, Circle’s Poloniex exchange will cover lost funds by covering trading fees back through June 6. Poloniex’s Clam margin trading market experience a flash-crash on May 26. A 2014 airdropped token credited to holders of bitcoin, litecoin and dogecoin, Poloniex allowed margin trading on the coin till a flash crash wiped out 1,800 bitcoins worth $13.5 million at the time.
The drop crashed Clam’s price 77 percent in just 45 minutes.
Poloniex socialized the lost coins to the exchanges bitcoin margin lending pool. A total of 0.4 percent of Poloniex users lost 16.2 percent of their funds held in the pool to cover the defaulted loans.
At the time, Poloniex blamed the flash crash on the velocity of sell orders along with a general lack of liquidity within Clam margin trading. Poloniex said it was pursuing borrowers who defaulted but the conclusion of the effort has yet to be disclosed.
On June 14, Poloniex began recrediting impacted accounts with 180 bitcoins distributed across 10% of those affected. Under a new policy, lost bitcoin funds will be returned by nixing exchange fees until fully repaid.
In response to the crash, Poloniex closed margin trading on BTS, CLAM, FCT, and MAID.
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