The aftermath of May market crash involving the obscure cryptocurrency clams (CLAM) has lead Poloniex to start crediting trading fees in bitcoin to lenders who lost funds.
Circle’s Poloniex is set to cover lost bitcoin funds by covering trading fees in bitcoin. This fees will be recovered back from June 6 until an account is fully repaid. According to an official blog post.
There was a flash-crash on May 26 experienced by Poloniex’s clam margin trading market. A 2014 airdropped token was credited to holders of bitcoin, litecoin and dogecoin. A flash crash wiped out 1,800 bitcoins worth $13.5 million at the time as Poloniex allowed margin trading on the coin till the crash.
In just 45 minutes, the drop crashed clam’s price 77 percent. Poloniex socialized the lost coins to the exchanges bitcoin margin lending pool. 0.4 percent of Poloniex users lost 16.2 percent of their funds held in the pool to cover the defaulted loans.
Meanwhile, Poloniex assumed that the flash crash should be blamed on the velocity of sell orders along with a general lack of liquidity within clam margin trading. Though the conclusion of the effort is yet to be disclosed, Poloniex said it was pursuing borrowers who defaulted.
Poloniex distributed 180 bitcoins to 10% of those affected by the flash crash on June 14th. The distribution was an initial method to repay the bitcoin lending pool. Lost bitcoin funds will be returned by repaying exchange fees in bitcoin under a new policy.
Poloniex closed margin trading on BTS, FCT, MAID and CLAM in response to the crash Imagine.
Credits: Peter Young
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