Poloniex, the US-based cryptocurrency exchange owned by peer-to-peer payments company Circle, has announced an update on its plans to reimburse investors affected by May's flash crash in the price of the CLAM altcoin.
On May 26, a sudden crash in the price of CLAM caused a number of margin loans to default: the result was an 1,800 BTC (around $9.5 million at the time) loss in the Poloniex bitcoin margin lending pool.
Because CLAM is such an obscure coin, when its price crashed it lacked the liquidity for the exchange to match all of the automated sell orders. As a result, the exchange said, some borrowers were unable to repay their margin loans with the digital assets they held on the exchange.
Another Step in the Roadmap
On its Medium blog site, Poloniex said it was announcing "another step" in its roadmap to make whole the lenders who were impacted by the losses. This follows its first step on June 14 where it distributed 180.73606744 BTC proportionately across those affected, representing around 10% of the original loss.
The company said:
Starting later in August, if you are an impacted lender, you will be credited your Poloniex trading fees until your losses are fully recovered.
Thus, every time a user pays a trading fee, the exchange will turn it to bitcoin and credit the user for those fees each day. The first credit affected users receive will include all the trading fees incurred since June 6.
In addition to the message on its blog , Poloniex also issued the release on a series of Twitter messages.
The company added:
Our work to make customers whole isn’t limited to our first payment or this new step of crediting trading fees. We are actively pursuing other strategies, and will update you when we can. We understand how upset customers are with this loss and we appreciate your patience. In addition to being committed to making you whole, we remain dedicated to earning back your trust.
Despite this apology, customers were not impressed with the company's "roadmap" and vented their anger on the company's Twitter posting.
User Samacumen said:
Is this a JOKE? Really. Just to increase dying volume on your exchange, you make your CLAM incident customer's life a lot harder. It'll take them 7 lives on Poloniex trading to make up for these losses! Show us some REAL steps. Make us WHOLE NoW!— Sam is NoT Sammy (@samacumen) August 12, 2019
10% back after one week, basically nothing back after more than 2 months. I can't even imagine what the next step will be like. It becomes very clear, that we will never get our money back!— CryptoHype (@hype_crypto) August 12, 2019