Global Digital Asset Exchange (GDAX) Vice President, Adam White, issued a follow-up statement regarding the multi-million dollar market sell order induced flash crash that momentarily drove prices as low as $0.10 USD after the order triggered an avalanche of stop order executions and margin position liquidations. The press release states that customers who experienced stop loss order executions or margin calls as a result of the dramatic price dive will be reimbursed.
Many Traders Suffered Serious Losses
GDAX saw a dramatic flash crash on its ETH/USD market this past Wednesday. GDAX blamed the flash crash on a multi-million dollar market sell order that instantaneously wiped 29.4% of the ETH value from the market, in turn triggering a flood of stop order executions and margin liquidations.
Many traders suffered serious losses, quickly taking to the internet to express their anger. A Google Document began to circulate attempting to rally angry investors to mount a class-action lawsuit. Although no violation was made against Coinbase’s terms of service and legal action would be unlikely to be successful, GDAX and Coinbase’s public perception seemed to be hanging in the balance – just weeks after the company announced that it will be seeking a $1 billion USD valuation.
On June 24 GDAX released their second official update regarding the June 21st flash-crash. The statement begins by iterating that “we are confident that all trades this week were executed properly, however, some customers did not receive the quality of service we strive to provide and we want to do better.”
The Company Announced That They “Will Follow up Directly With Affected Customers About This Process Next Week.”
“We will establish a process to credit customer accounts which experienced a margin call or stop loss order executed on the GDAX ETH-USD order book as a direct result of the rapid price movement at 12.30pm PT on June 21, 2017. This process will allow affected customers to restore the value of their ETH-USD account to the equivalent value of their ETH-USD account at the moment prior to the rapid price movement.”
GDAX also clarified that it would be honoring all executed buy orders that occurred during the crash, putting an end to rumors circulating online regarding the possibility that the exchange may move to reverse the profitable trades of those who managed to purchase undervalued ethereum tokens.
The company also announced that they “will follow up directly with affected customers about this process next week.”