Poloniex's new leadership team is looking to make things right with clients who lost millions of dollars from a liquidation of clams in its market.
No, not steamed clams, crypto CLAMs: a digital asset that's on certain offshore crypto exchanges. On May 26 of 2019, $CLAM collapsed more than two-thirds of its value during the course of the trading day, resulting in the margin lending pool incurring a more than $13 million USD loss in today's price of bitcoin.
Now, Poloniex — which spun off from Circle last year — said it will be paying back clients for the losses incurred from the flash crash. Still, some clients will not be paid back the losses for all clients.
"First, earlier today we deposited a payment of up to 0.0047 BTC to every impacted customer who has not been fully repaid yet," Poloniex said in its statement. "For those of you whose losses are at or below this amount (and there are over 1,000 of you), you have now been 100% repaid for your losses. For all other impacted customers, we recognize that this only represents a portion of your loss."
0.0047 bitcoin is the equivalent of a ~$2.50 payment, which is what $CLAM traded at shortly after the flash crashed. It was trading at above $18 prior to the flash crash.
Moving forward, in order to cover the remainder of losses, Poloniex said it would not charge impacted clients lending fees until the loss is fully recouped.
"Even though reimbursing trading fees may not be meaningful for all customers, we are committed to continuing it as many of you are actively trading on our platform and accelerating your repayment as a result," the firm said.
Even further, the exchange added:
"In addition to the new reimbursement steps we have outlined above, we continue to work hard to pursue and recover the funds from defaulted borrowers. This is a challenging and lengthy process and we commit to sharing more information as it becomes available in the coming months."
Some traders were bemused by the news. IAmNomad, an anonymous crypto market maker tweeted:
"Are you joking! you waited till price was rock bottom to pay back people?"