How is that possible?
Anyone to explain?

Hello TheXpert,
I will write you a PM for more details on whats next, but for everyone here is what happened. We are currently testing a new trading engine on DRKUSD and DRKBTC pairs only. Initially this engine used a feedback loop to confirm new balances after exchange execution. Problem was when you inserted the same type of orders for the same account in between this loop, like your bot was doing by sending the same marketable orders over and over, the exchange balance checking would be screwed and allow for a negative balance before catching up with your actual balance.
This wasn't such a serious problem anyway as there was a circuit breaker in place that would limit any possible negative loss to a maximum of 1,000 usd.
Anyways this has now been corrected (this was the purpose of testing on very small volume pairs like DRK). Your bot has been very useful in this regard.
Have a good day
Raphael
Bitfinex team
Compensate him. Each member of the community will decide whether or not the amount of your compensation is worth the risk of allowing a negative balance. Many of us figure that once we run out of the money a bot can spend, we'll just leave it until we get around to adding more. It looks like you allowed it to continue losing when reason suggests you should have stopped it.
I suspect that you already decided to eat his losses, so why not publish that fact? It would encourage us to test your exchange :-)