GDAX to Compensate Customers Who Lost Money in ETH Flash Crash

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Ethereum experienced intense volatility last week, leading to its price crashing as low as $0.10 on GDAX. The exchange now says that it intends to compensate customers for whom stop-losses were triggered during the fall.

Reasons for the crash
Ethereum has been one of the star performers in the cryptocurrency space, rising over 40x in 2017. However, network congestion and two ICOs resulted in price volatility last week.

Problems at exchanges also contributed to the uncertainty, resulting in Ether price falling. A large sell order (96,100 ETH) at GDAX resulted in the price slipping from $317.81 to $224.48.

This resulted in stop-loss orders and margin positions getting triggered, resulting in the price slipping momentarily to as low as $0.10

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How can they compensate customers? The losses incurred by those who were stopped out, were gains for anyone with limit buy orders. Where is the money going to come from to compensate the losses?