Poloniex users are threatening to sue the exchange platform after the lenders lost about $13.5 million in a CLAM price crash. In order to recover the lost funds, the exchange slashed the principal of active BTC loans by 16 percent and we are reading more about it in the coming altcoin news today.
CLAM’s price fell from $20.30 on May 26 to $6.10 after the two-hour flash crash and the sudden price drop caused the majority of the margin loans to default on the platform. As a result, the margin lenders at the exchange lost about 1,800 BTC according to the blog post that the company posted yesterday.
The exchange was unable to process the automatic liquidations due to the velocity of the crash and according to the exchange:
“In addition, a significant amount of the total loan value was collateralized in CLAM, so both the borrowers’ positions and their collateral lost most of their value simultaneously. As a result, some borrowers were unable to repay their loans with the digital assets they held on Poloniex.”
To cover the losses Poloniex managed to perform a 16.2% cut from all active BTC loans on the platform and even froze the defaulted borrower accounts until they manage to repay the loans to the lenders. The losses made an impact of about 0.4 percent of the users. Reddit users reacted:
“It’s just theft. Haircut… you mean theft?”
Poloniex users blamed the platform for the issue saying that the company was responsible for the lender losses and not the users. They have also been talking about launching a lawsuit against the exchange. They are very pessimistic, however, of the outcome considering that Circle which is backed by Goldman Sachs owns the crypto exchange.
As reported earlier in the latest cryptocurrency news, socializing losses is illegal in the United States where the Poloniex crypto exchange is based. This means that users still have a great shot of winning in a possible lawsuit against the exchange platform. In order to avoid any kind of legal cases, Poloniex should take responsibility for the margin trading problem and possibly to refund the lender’s funds in order not to get sued and lose even more money.
DC Forecasts is a leader in many crypto news categories, striving for the highest journalistic standards and abiding by a strict set of editorial policies. If you are interested to offer your expertise or contribute to our news website, feel free to contact us at [email protected]
Stefan has been writing articles for DCForecasts since 2016 in-house full time. As one of our main cryptocurrency writers, he focuses on covering the latest cryptocurrency news, technical charts, price analyses of coins and press releases. When he is not exploring and covering the latest topics in crypto, you can find Stefan playing basketball, tennis or cycling.
DC Forecasts - Newsletter and get recent news directly to your inbox! Daily Newsletter Bitcoin NewsAltcoin NewsLitecoin NewsEthereum NewsBlockchain NewsBitcoin ScamsRegulationExpert AnalysisPress ReleasesCardano NewsRipple NewsLibra NewsBitcoin Cash NewsTron NewsNexo NewsVechain NewsStellar NewsTezos NewsBinance Coin NewsCoinbase NewsChainLink NewsEOS NewsIOTA NewsTether NewsBitcoin SV NewsMonero NewsEthereum Classic NewsDash NewsUNUS NewsCosmos NewsMECX Token NewsNEO NewsDC Forecasts Announcements
Daily Newsletter Bitcoin NewsAltcoin NewsLitecoin NewsEthereum NewsBlockchain NewsBitcoin ScamsRegulationExpert AnalysisPress ReleasesCardano NewsRipple NewsLibra NewsBitcoin Cash NewsTron NewsNexo NewsVechain NewsStellar NewsTezos NewsBinance Coin NewsCoinbase NewsChainLink NewsEOS NewsIOTA NewsTether NewsBitcoin SV NewsMonero NewsEthereum Classic NewsDash NewsUNUS NewsCosmos NewsMECX Token NewsNEO NewsDC Forecasts Announcements
DC Forecasts provides a comprehensive source of the latest news about cryptocurrency news daily. Read more on our about us page for details.