In an unprecedented move, GDAX will pay out of its own company pockets to “affected customers who had margin calls or stop loss orders executed ” on June the 21st when ethereum flash crashed to ten cent.
GDAX stated that “all trades this week were executed properly,” but, some of their customers did not receive the quality of service GDAX strives to provide, they said. Therefore:
“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.”
We asked for an estimate of how much that would cost GDAX, but have not received a reply in time for publishing. A rough estimate would probably be somewhere between $5 million to $10 million, with potentially as much as $20 million on the line.
This is a first in this space at this scale. When Kraken, for example, was DDoSed at the same time as a large sell order sent price down to $20, with many criticizing them for not freezing trading, they did not compensate as far as we are aware.
Many ethereans therefore are stating GDAX has gone beyond their duty to win the goodwill of eth’s community, with some suggesting they may even be saving lives in the process. One eth trader for example said regarding a trader that stated he was to commit suicide over the GDAX event:
“That’s a friend of mine and he’s alright. I talked to him for a couple hours after I found his note and talked him out of it. I run a small trading group of young guys and many of them lost everything, but he was the worst of them all. Spirits in our chat are very high right now.”
Trading, of course, can be a risky business, with potentially high rewards as well as potential to lose it all, but GDAX’s latest announcement is clearly very welcomed.
However, these events have now been happening monthly for the past three months. There needs to be some sort of procedure, some sort of process, to prevent such flash crashes, but, since the June 21st flash crash will now cost GDAX plenty, they are most probably aware of the requirement for such process more than anyone else.