[blater]

exactly the same thing happened to me with Litecoin on GDAX.

They sold off my entire holdings for $0.01 - $0 after fees. At the time LTC was trading for something like $25/LTC.

It took about 3 weeks to get anything but an automated response from their support team.

This was the response:

"After further review, this sell was due to a margin call of your margin position on the LTC/BTC order book. A series of large sell orders were placed on the LTC/BTC order book on May 21, 2017 around 1am UTC causing a large price decline which triggered a margin call of your position when your maintenance margin ratio was exceeded.

The trading engine and margin call functioned as designed. The large price decline was due to the relatively low liquidity on the order book at that time."

They eventually refunded the coins.... but a couple of days later removed half of the refund with no explanation. I'm out of pocket by about $1200. I'm still waiting for a response from them on that one.

[martinko]

I don't see a reason why you should be refunded anything. As I understand it, you were margin long and you got margin called after someone dumped into a relatively low-liquidity market.

[dsacco]

Waiting for a response? You were margin called, why did they refund you anything at all? The margin call did exactly what it's supposed to: mitigate the broker's exposure to your downside risk as it increases beyond your account size.

[piaste]

> They sold off my entire holdings for $0.01 - $0 after fees.

Why did you have such an order? I can understand a stop loss order at some small percentage of the original purchase price, because you still get something, but one that says "if this currency suddenly becomes worthless, give it away for $0.01" doesn't make any sense.

[abandonliberty]

Sounds like a stop order without the limit.

https://en.wikipedia.org/wiki/Order_(exchange)#Stop_order

>When the stop price is reached, a stop order becomes a market order.

Market value was extremely low due to low liquidity.

This is a risk with stop orders that many investors aren't familiar with.

[SilasX]

Was LTC trading for $25 on that exchange, at that moment? If some big dump wiped out the available buyers and it became illiquid then that may have been all they could do to meet the margin: sell at huge discounts over a huge number of trades such that fees become significant.

AIUI, the way margin buying works is, the first, second, and third priorities are repaying the broker, and the moment your collateral looks like it might not be enough they will dump everything without caution to get the money back, which can result in making stupid (in hindsight) trades.

With that said, I do have a hard time believing there were no buyers at a price closer to $25, so that definitely seems shady. But margin buying is playing with fire and I'd say it could have been a lot worse ...

[if_by_whisky]

It sounds like you lost a bet.

[Anderkent]

But he was promised 10x returns! Look at this graph!

[lordlimecat]

That's OK, people investing in crypto currencies will either not see or dismiss stories like this in their pursuit of wealth.