The “sinking” of the Ether crypto currency, with temporary losses of more than 50% on the Kraken crypto currency exchange, was the result of mass sales and not a technical malfunction of the trading mechanism, as stated by the CEO of the latter.
Crypto currency prices fell sharply on Monday, with many tokens falling more than 20% during the session.
Ether, the second-largest digital currency after Bitcoin, reached $700, down from about $1,600 in Kraken, according to data from Coindesk.
“We are in the process of being investigated”, stated Jesse Powell, CEO of Kraken. “There is no evidence of any kind of technical malfunction. It seems that the transactions were accurately recorded “.
Powell pointed out that the losses may have increased due to margin trading and stop-loss movements in the stock market.
“It could be the only investment whale that has decided to redeem the savings of a lifetime,” he added.
Ether was down on Tuesday, falling as much as 19% to close at $1,450 in London.
Kraken does not intend to cancel transactions, its CEO clarified, however, leaving the door open for the possibility of compensating customers who were affected by particularly sharp and shocking investment moves. “Maybe we can finally do something for these people. We are looking for it,” he said.
At a time when crypto currency excitement is sweeping the markets, from billionaires to indiscriminate micro-investors, high price volatility raises questions about the stock markets where they trade.
The industry is subject to minimal regulation by the authorities and the UK Financial Supervision Authority has warned investors that they are in danger of recording large losses.
The risk, however, has not deterred investors, who feel favoured by the recent price spike. Powell stressed that Kraken has seen its new customers increase fivefold in recent months.
