Quote from: countryfree on June 10, 2019, 02:43:40 PM

Quote from: PrimeNumber7 on June 10, 2019, 12:17:20 AM

Please see this:

Quote from: https://poloniex.com/terms/

Are you working for Poloniex?

Actually, I'm still getting the facts, and I have yet to understand how Poloniex took money from its clients.

I'm a victim here, my money was lent at Poloniex. It was not sitting waiting for an offer, it was lent. On Friday, the sum of money I had lent has been reduced by 16%. But the loans I had were still running. And that money, it was used by people doing some margin trading. So, those people doing margin trading at the time, have they experienced a 16% reduction of their trades?

We're talking about 1,800 BTC here. If I look at the daily volume traded at Poloniex, it's very, very substantial.

No I have never been affiliated with Poloniex, and after this incident I probably wouldnt be interested in working for them if an opportunity presented itself.

I have an account with Poloniex that has dust amounts due to not closing out entire positions when trading and I have lent on Poloniex among other exchanges in the past.

Based on the available public information, Poloniex is claiming there were 11,250 btc, approximately in outstanding margin loans on the day of the flash crash. They are claiming that some positions were force liquidated and upon liquidation, after bringing account balances down to zero, there remains a deficit of 1800 btc that cannot be repaid. They have not said this, but I presume they kept these margin loans outstanding so lenders could not withdraw coin that should be deducted from their balance.

It is a well known risk that margin loans may not be repaid in full. This risk is disclosed in the TOS of any exchange that offers margin loans. Most exchanges will cover margin losses in order to maintain confidence in their lending markets, that will lead to higher liquidity and trading volumes. In this case, Poloniex probably decided the cost of covering the losses exceeded the additional revenue that continued margin lending will lead to.

Not everyone who had a margin loan outstanding at the time defaulted nor has negative equity, for example a customer who borrowed btc to bet on ETH going up presumably can repay their margin loan as agreed. Instead of deducting the balance from specific lenders whose loans defaulted, Poloniex socialized losses among all btc lenders. It is unclear to me if this specific action is legal and in accordance with their TOS, but I also understand why they would want to be this, and I would presume they obtained legal counsel to advise them the legality of this action.