As many of you know, there was a severe CLAM price crash on Poloniex in May 2019 that resulted in a generalized loss of approximately 1,800 BTC across our BTC margin lending pool. We know how frustrating this situation, and subsequent communication, has been for impacted customers.
Since Poloniex spun-off from Circle in November 2019, our new executive team has been evaluating the prior response and would like to offer our sincerest apology for the lack of communication. We fully recognize that the situation could have been handled more professionally and know that we need to regain your trust.
Under Circle’s ownership, two steps were taken to repay customers for the losses incurred. The first was an initial bulk payment made to reimburse 10% of each customer’s losses on June 12, 2019. On August 17, 2019, the second step of refunding trading fees began. 53 customers have been fully repaid through these initiatives, and we know this isn’t nearly enough.
Today, we are announcing four steps we will be taking to make this right for you.
First, earlier today we deposited a payment of up to 0.0047 BTC to every impacted customer who has not been fully repaid yet. For those of you whose losses are at or below this amount (and there are over 1,000 of you), you have now been 100% repaid for your losses. For all other impacted customers, we recognize that this only represents a portion of your loss.
Second, in April we will make a bulk payment to reimburse all lending fees you have incurred since the June 6, 2019 incident, until you are made whole. This includes over nine months of lending fees and represents our appreciation for your continued activity on Poloniex.
Third, following the bulk payment next month, we will start reimbursing all future lending fees for impacted customers, until you are made whole. This reimbursement complements our existing policy of reimbursing all trading fees for impacted customers. Even though reimbursing trading fees may not be meaningful for all customers, we are committed to continuing it as many of you are actively trading on our platform and accelerating your repayment as a result.
Finally, in addition to the new reimbursement steps we have outlined above, we continue to work hard to pursue and recover the funds from defaulted borrowers. This is a challenging and lengthy process and we commit to sharing more information as it becomes available in the coming months.
As a reminder, you can always view the real-time progress of repayments in the Deposit History section of your account.
Protecting for the Future
While we recognize that repayment is a critical step, we have also been working to improve our platform, protect against this kind of incident in the future, and make strides to provide a safer margin and lending experience for our customers. Our recent improvements include:
- Removing lending and margin markets for 4 illiquid assets including BTS, CLAM, FCT, and MAID
- Adding audits and automated triggers to better monitor risk in lending and margin markets
- Implementing further market protections to help mitigate major price slippage and over-concentrated positions
We’re committed to regaining your trust through repaying losses, building healthier markets, and improving our communication. We promise to provide monthly updates, no matter how large or small. We’ve also created a new section on our Help Center where you can view all prior and future updates, so keep checking back.
If you have any questions, please reach out to us and we would be happy to provide additional support. Thank you for sticking with us through this process!