I never really understand how this works. OK a flash crash I've seen, prices just go down suddenly, but how did this affect borrowers and lenders? If you borrow something you have to pay it back, that's all, right? So how is it people had to pay from their wallets? Doesn't the exchange bear these types of losses?
Let's say that user 1 has assets worth 300$ (coin B). And borrows 200$ (coin A) from user 2.
Let's say that user 1 converts the borrowed money into coin B too. So total 500$ coin B. Then suddenly coin B crashes and the old 500$ now worth only 100$.
How can user 1 pay the debt? Well, he may get more coins from home or simply close the account.
I guess that the code tried to sell user 1 assets at around 200$ but the sudden crash didn't allow that.
I also guess that the code may not even have all the safety nets so the user ending up in debt will pay back next time he puts money into Poloniex!
However, the lender is told somewhere between the lines that there's a "small" risk. I've seen that when I was lending some small amounts at Poloniex about 3 years ago.
So no, the exchange will not bear these loses.