GDAX, the digital asset exchange operated by Coinbase, is moving to issue refunds after a stunning flash crash last week stoked anger amongst affected traders.
Ether prices dramatically plunged to $13 on GDAX amid a broader market decline on Wednesday. The fall triggered a margin call, liquidating positions held by leveraged traders, though the price soon bounced back above the $300 level at the time.
Coinbase ultimately opted to disable trading of the ETH/USD pair and temporarily block withdrawals of ether while it moved to investigate the situation.
In an update that followed on its official blog, GDAX said that it planned to honor every transaction, stating that no no technical issue with its system was found.
Yet in a follow-up blog post published two days later, Coinbase vice president Adam White reiterated the startup’s position that the platform functioned as intended, but acknowledged that “however, some customers did not receive the quality of service we strive to provide and we want to do better”.
White wrote:
“For customers who had buy orders filled — we are honoring all executed orders and no trades will be reversed. For affected customers who had margin calls or stop loss orders executed – we are crediting you using company funds.”
Thus far, the degree of loss involved (and the exact amount that will be compensated) remains unknown.
The decision to refund users came amid growing complaints from Coinbase users – who alleged that the situation was exacerbated by a lack of accessibility to the exchange during the volatile period – and calls for legal action to recoup losses.
Despite largely recovering, the price of ether has fallen since last week’s crash. At press time, the price of ether is $248.
Disclosure: CoinDesk is a subsidiary of Digital Currency Group, which has an ownership stake in Coinbase.