Crypto derivatives exchange Deribit will pay $1.3 million to users affected in the bitcoin flash crash that took the price to $7,700.
According to a tweet published Nov. 1, the exchange took responsibility for the crash that occurred on Oct. 31, which involved the price of BTC suddenly falling from above $9,000 to $7,700. Deribit says it will reimburse clients involved in the crash, which amounts to more than $1.3 million. The update also informs users the exchange will not be dipping into its insurance fund to cover the losses, but instead handle it out of pocket.
Deribit will reimburse over $1.3 million in losses from the BTC index calculation data issue around 21:00:00 UTC on October 31, 2019.— Deribit (@DeribitExchange) October 31, 2019
The Deribit Insurance fund will not be used to cover these losses, but compensation will be covered by Deribit.
Deribit explained that an outlier value, which was inappropriately calculated by the exchange, caused BTC sellers to be paid in a lower value than the market or book price for bitcoin, leading to a loss of more than $1.3 million in the ensuing crash. Deribit says the outlier should have been removed from the index rather than being allowed to influence the price.
The exchange reiterated its commitment to solving the issue and reimbursing those affected by the crash.
We have reimbursed all affected accounts. A total of ~150 BTC has been reimbursed by Deribit.— Deribit (@DeribitExchange) November 1, 2019
The insurance fund will remain unaffected and all reimbursement will be paid by Deribit Company reserves.
Again, our sincerest apologies for all inconvenience caused.
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