Details have surfaced of a violent flash crash on Global Digital Asset Exchange’s (GDAX) ETH markets today, with Ethereum tokens being sold for prices as low as $0.10. Amidst a dramatic uproar from angered traders, some are attempting to mount a class action lawsuit against the company.
Reports Surfaced of Traders Losing Extreme Amounts Money During Violent Slippage on GDAX’s ETH-USD Market
Global Digital Asset Exchange (formerly Coinbase Wallets) provides Coinbase wallet owners with an exchange interface for bitcoin and cryptocurrency trading. GDAX offers fiat to cryptocurrency pairings to traders in 32 different countries, with Coinbase offering simple bitcoin transactions and storage services to 190 nations.
On Wednesday reports surfaced of traders losing extreme amounts money during violent slippage on GDAX’s ETH-USD market.
Vice president of GDAX, Adam White, has blamed the crash on a multimillion dollar sell order that apparently drove prices from $317.81 to $244.48, resulting in an instantaneous $29.4% loss of value. The order then triggered approximately 800 stop losses, seeing widespread liquidations among traders in leveraged positions.
The crash saw ETH tokens being sold for as little as $0.10 USD. Many fortunes shattered as the price plummetted before many fortunes were made by those who were able to purchase drastically undervalued ETH tokens.
An official post has been published on GDAX’s blog, stating “our initial investigations show no indication of wrongdoing or account takeovers. We understand this event can be frustrating for our customers. Our matching engine operated as intended throughout this event and trading with advanced features like margin always carries inherent risk. We are continuing to conduct a thorough investigation and will keep customers updated with any resulting actions. With that in mind, it is important to note that these trades are final in accordance with our GDAX Trading Rules (Section 3.1). Honoring properly executed orders is critical to maintaining the integrity of an exchange.”
Coinbase Have Been Overcome by Technical Difficulties Lately
With GDAX’s terms of service stating that all trades are final, some unhappy investors are attempting to mount a class-action lawsuit against the company. A Google document file is currently being circulated, with any investors who lost capital due to the crash being encouraged to join. Despite their best efforts, many within the cryptocurrency community are highly skeptical as to the likelihood that sullied investors will be able to retrieve their losses – citing the failed attempted lawsuit against cryptocurrency exchange Poloniex after losses were sustained by investors due to technical errors besieging the exchange.
Coinbase have been overcome by technical difficulties lately, with the crash coming approximately one week after Coinbase and DGAX both experienced problems during peak-volume trading periods. The problems resulting in complaints from users who found themselves locked out of their accounts and unable to manage trades. A similar incident of extreme slippage occurred in April, with GDAX an extreme drop in price to a low of $0.06 during scheduled website maintenance.
GDAX’s slippage has been one of the numerous issues that have plagued the ethereum markets over the course of the past week. A glut of over-hyped ICOs have recently entered the markets, resulting in popular wallet service Myetherwallet to receive thousands of complaints after experiencing technical difficulties, in addition to the Ethereum network experiencing severe congestion. Many are interpreting the problems as a likely catalyst that the much anticipated ‘flippening’ (ethereum coming to overtake bitcoin as the cryptocurrency that boasts the largest total market capitalization) not to take place soon, or ever, as the recent dramas may inspire ethereum investors to realize profits and reduce risk exposure.
What would you do if you had lost money during GDAX’s flashcrash? Share your thoughts below!
Images courtesy of Shutterstock
Bitcoin is cool, and you know everyone wants in – even the ones who say they don’t. Show the world how cutting-edge you are with a bitcoin T-shirt, hoodie, bag, key-ring, even a Trezor hardware wallet. Shipping all over the world, quality merchandise and, of course, a payment system that makes people say “wow!”.
Purchase Bitcoin without visiting a cryptocurrency exchange. Buy BTC and BCH here.