Ethereum Traders File Class Action Lawsuit Over Kraken Flash Crash
July 5, 2017 | Back to News
A class-action lawsuit has been filed against cryptocurrency exchange startup Kraken over issues stemming from its management of a May flash crash. The lawsuit was filed on behalf of the plaintiffs by the Florida-based Silver Law Group, which has been involved in lawsuits filed against the now-defunct exchange Cryptsy and digital currency startup Coinbase. Wites & Kapetan, another law firm based in Florida, is also involved in the suit.
Less than two months later, five customers of the exchange are alleging negligence, breach of contract and unjust enrichment, arguing that Kraken should have suspended trading amidst a denial-of-service (DDoS) attack that impacted its operations.
Newly filed court documents name five plaintiffs, including one in the US, two in Israel and two others based in the UK, while Payward Inc, which does business as Kraken, is named as the sole defendant. Between the five customers, a total of 3,414.078 ETH – an amount worth roughly $329,000 at a price of $96.32 – was liquidated.
That amount is equal to about $911,000 at press time.
reports at the time attest to a plunge in the price of ether, the cryptocurrency of the ethereum network, on the exchange’s order books, with market data from CryptoCoinCharts.info
showcasing how prices touched a low of $26, resulting in a wave of liquidations.