Margin Lenders Lost $13.5 Million in May to Poloniex Crypto Crash

Crypto exchange Poloniex revealed in a post Thursday that lenders in its bitcoin margin lending pool suffered a loss of 1800 BTC — roughly $13.5 million at current market prices — due to a flash crash in the Clams (CLAM) market on May 26. On May 26, the margin tradable Clams (CLAM) market dropped by nearly 77 percent in value in just 45 minutes on Poloniex, causing a flurry of liquidations designed to cut losses in order to repay the lender.

In the post, Poloniex stated: “The velocity of the crash and the lack of liquidity in the CLAM market made it impossible for all of the automatic liquidations of CLAM margin positions to process as they normally would in a liquid market.” To combat another situation like this going forward, Poloniex is taking steps to protect its margin users including removing illiquid markets such as BTS, CLAM, FCT, and MAID, add adding layers of processes and protections to monitor the risk in its margin markets.

Timeline of Clams, Bitcoin, Bitshares, Factom, Maidsafecoin