Clams? Poloniex Socializes 1,800 Bitcoin (BTC) Margin Loan Loss

A sudden collapse in the price of Clams (CLAM) caused a number of margin loans to default.

Circle’s cryptocurrency exchange subsidiary, Poloniex, revealed on Thursday that a sudden crash in the Clams (CLAM) market, an obscure altcoin, has resulted in roughly 1,800 BTC (~$14.4 million) in margin loans to default.

On May 26, a sudden, severe price crash in the CLAM market caused a number of margin loans to default, resulting in a roughly 1800 BTC loss in the Poloniex BTC margin lending pool for non-US customers.

— Poloniex Exchange (@Poloniex) June 6, 2019

According to the announcement, the rate by which the illiquid CLAM market dropped on May 26 made it impossible for all of the automatic liquidations of CLAM margin positions, which apparently exist, to process as they normally would in a liquid market.

“A significant amount of the total loan value was collateralized in CLAM, so both the borrowers’ positions and their collateral lost most of their value simultaneously,” states the Poloniex team. “As a result, some borrowers were unable to repay their loans with the digital assets they held on Poloniex.”

Poloniex reportedly hopes to track down the defaulted borrowers to get them to repay, but in the meantime, the losses will be socialized across the platform. Additionally, Poloniex is removing margin trading for 4 assets, Bitshares (BTS), Clams, Factom (FCT) and MaidSafeCoin (MAID), while also adding extra security layers to protect lenders.

CLAM is currently down 10.2% on the day to $4.49, giving the altcoin a $16.3 million market cap.