Bitcoin Infochain: GDAX Bails out Margin Traders Affected by Ethereum Flash Crash
Saturday, June 24, 2018
GDAX Bails out Margin Traders Affected by Ethereum Flash Crash
It emerges spil if the GDAX exchange has come to a conclusion regarding the latest Ethereum flash crash earlier this week. A loterijlot of margin traders were not too glad about this development, resulting ter hefty financial losses. GDAX instantaneously embarked an investigation to see whether or not something went wrong on their end. That is not the case, yet it shows up the company will let affected users restore the value of their accounts regardless.
The ETH Flash Crash on GDAX Will Be Semi-Reversed
A lotsbestemming of people were taking by verrassing earlier this week, spil they noticed the ETH/USD price crashed to US$0.Ten on the GDAX toneelpodium. Considering how other exchanges were seemingly unaffected by this development, many people very first assumed this wasgoed a technical glitch. That is not the case, spil a loterijlot of buy orders were effectively packed by this odd trading behavior. Moreover, a lotsbestemming of margin traders on GDAX lost good chunks of money because their orders got liquidated te the process.
Te most cases, very few exchanges will rectify this situation and terugwedstrijd losses to margin traders. That is only to be expected, spil margin trading is a high risk- high prize zuigeling of play. Traders take the foot responsibility for their margin trading positions and are expected to take profits and losses spil they come along. Ter this particular incident, however, GDAX faced a loterijlot of backlash, which coerced them to make a very unusual decision last night.
More specifically, GDAX will create a fresh process to credit customer accounts affected by this flash crash earlier ter the week. All affected customers will be able to restore the value of their ETH/USD account to the omschrijving value of their balanceo at the ogenblik prior to the crash. Anyone who had buy orders packed will not see trades reversed, tho’, which is good to see. Margin trading users will receive a “refund” from the GDAX team themselves.
Unluckily, this a very dangerous decision by GDAX which could set an exceptionally troublesome precedent. Bailing out margin traders for something that is not the company’s fault by any means should never toebijten ter the very first place. This can set a precedent te which margin traders will expect a refund every time the market responds te an utterly volatile manner. It is certainly possible companies other than GDAX would need to enforce such a rule te the future.
While it is commendable to see GDAX take such a bold course of activity, the decision is causing a lotsbestemming of social backlash already. Many people feel GDAX only does this because the traders ter question suffer from issues with the Ethereum price. If it were Bitcoin, it is very questionable the company would do the same spil they are doing right now. Such statements are understandable, even however they are not exactly based on any existente evidence.
Bailing out Ethereum users and traders is becoming something of a regular occurrence, however. Not too long ago, investors of The DAO were “ bailed out ” through a network hard fork. GDAX is now refunding ETH margin traders suffering from issues not caused by the company. A pattern is embarking to form for those people who stiffly believe ter conspiracy theories, that much is certain. Margin traders can always cause losses, and it should not be up to service providers to bail out users if the “crash” is not a fault caused by the company itself.
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