Benjamin Friedrich/The Block

Poloniex could leave itself open to legal threats by socializing 1,800 BTC loss

Quick Take

  • After altcoin CLAM experienced a severe price crash, BTC margin lenders on Poloniex suffered a severe loss as many CLAM traders defaulted
  • Poloniex socialized the ensuing 1,800 BTC loss among principal of all active BTC loans, even those that weren’t active at the time of the crash
  • This could incur a legal battle in the U.S., since it’s illegal to socialize losses there, according to attorney David Silver
Legal questions hang over Poloniex, the cryptocurrency exchange, after a price crash in a little known alt coin forced the firm to liquidate the positions of traders on the platform. What happened On May 26, altcoin $CLAM collapsed more than two thirds of its value during the day, resulting in the margin lending pool incurring […]

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May 5, 2022, 3:17PM UTC