GDAX Makes Ground-Breaking Decision to Reimburse Margin Traders

GDAX has made the ground-breaking decision to reimburse all margin traders who were directly affected by the events that happened two days ago, when the Ethereum price dramatically dropped to $0.10 on GDAX in a single massive multi-million dollar sell, causing all the Ethereum margin traders to be liquidated. This caused them to lose all of their hard-earned profits. Yup, all of their profits.

We will establish a process to credit customer accounts which experienced a margin call or stop loss order executed on the GDAX ETH-USD order book as a direct result of the rapid price movement at 12.30pm PT on June 21, 2017. This process will allow affected customers to restore the value of their ETH-USD account to the equivalent value of their ETH-USD account at the moment prior to the rapid price movement.

Many people complained that this was all GDAX's fault and that they should have had countermeasures, yadda yadda yadda. But it really wasn't. GDAX functioned correctly when those trades were executed, and all the margin traders knew the risks of it. GDAX didn't break or malfunction; on the contrary, it did everything right. It could be argued that they should have had a "circuit-breaker" in, but that is a hard thing to implement on these volatile cryptocurrency markets and they really don't have any obligation to do that.

Well Done, GDAX

So I say well done, GDAX. They've gone completely above and beyond what they should have done to reimburse everyone who lost money, even though all the trades were legit and in line with their terms and conditions. As GDAX themselves said:

We view this as an opportunity to demonstrate our long-term commitment to our customers and belief in the future of this industry. We will follow up directly with affected customers about this process next week.

In this way GDAX has solidified its reputation and shown that they care about their customers, even when GDAX was not at fault when people legitimately lost money in this event, using their own company funds.
Also, as one person commented:

They will definitely be making the money back from returning customers alone. It's a wise long term move. I applaud their leadership.

Another unconfirmed report says that:

They will start using triggers to stop trading momentarily if the price drops too fast.

So it seems that GDAX will be implementing some form of "circuit-breaker" to prevent things like this from happening again.

GDAX handled this situation admirably, making them the example that all other exchanges should follow.