GDAX to Reimburse Traders for Losses During Flash Crash

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Despite the GDAX exchange’s announced decision to honor all trades that occurred during the Wednesday flash crash, many of the exchange customers who lost money during that event will apparently see the value of their holdings restored. GDAX vice president Adam White made the announcement in a Friday blog post, and explained how the company intends to ease those customers’ pain.

Though White expressed confidence that the trading activity during the flash crash was entirely legitimate and properly executed, he also suggested that GDAX believes that its customers were not provided with the type of service they deserve. He then outlined the company’s plan:

“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.”

The plan will treat buy orders differently than stop loss orders and margin calls. According to White, all of the buy orders executed during the flash crash will be honored by the exchange. However, customers whose ethereum was sold as a result of stop loss orders and margin calls will have their holdings restored to their accounts. The company will apparently use its own funds to accomplish that feat.

White concluded the post by stating, “We view this as an opportunity to demonstrate our long-term commitment to our customers and belief in the future of this industry. We will follow up directly with affected customers about this process next week.”

Author: Ken Chase

Freelance writer whose interests include topics ranging from technology and finance to politics, fitness, and all things canine. Aspiring polymath, semi-professional skeptic, and passionate advocate for the judicious use of the Oxford comma.

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