Cryptocurrency exchange Kraken is offering refunds to traders hit with losses due to the dip in Ether (ETH)’s price.
The sharp fall in the price of Ether occurred on February 22. The price of Ether on Kraken fell to $700, significantly below its low point on other major exchanges.
Following the calls for compensation for the flash-crashes from users, Kraken has offered refunds to its customers, ranging in size from 5% to 50% of their losses.
Kraken’s CEO Jesse Powell said the business was “coming out of pocket to help some people out for the sake of client retention.”
“Larger cases are evaluated individually. Smaller cases received an automatic credit. Amounts are based on what they would have received had the price floor been what it was at another venue. Generally, 80-100% of that is credited, combo of cash + fee credits,” he tweeted.
ETH Flash Crash Exacerbated by Margin Trading
However, after an investigation on the sell-off incident, Kraken stated that its trading engine had “processed orders correctly.” The plunge of more than 50% in Ether’s price on the exchange was caused by extreme selling, according to Powell, and not by a trading-engine malfunction.
The losses could have been exacerbated by the availability of margin trading and stop-loss orders on the exchange. Customers should not trade with leverage if they don’t understand the risks, he added.
Margin traders on Kraken are outraged after the liquidations triggered by the ETH flash crash, while the exchange was inaccessible to users. They have been demanding compensation for the flash-crashes.
Powell said the exchange would do what it could to help its customers. But it would not “bend over backwards to meet unreasonable demands.”