As the cryptocurrency bitcoin cash surged to a high of $2,500 last weekend, clients of Trading 212, a brokerage based in the U.K., Germany and Bulgaria, were sitting on fat profits, in some cases hundreds of thousands of pounds.
That is, until Sunday, when the cryptocurrency took a nosedive – and the firm suspended trading.
Unable to close their positions, the affected customers could only watch as the price of bitcoin cash fell more than $800 in under an hour. Trading 212 says the suspension lasted only 10 minutes, but according to the traders, that was all it took to erase in some cases sizeable gains.
Not taking it lying down, 54 customers went so far as to set up a WhatsApp group called “People v 212,” where they compared notes about how to reclaim their alleged missing gains.
All told, the Trading 212 clients – many of whom described their frustrations in interviews or emails – say they lost an estimated £10 million ($13.2 million), though some have settled their complaints with the company. For example, a group of traders from Cardiff, Wales, has accepted an offer to pay out a proportion, about 10 percent, of the profits they say they were owed.
Aside from temporarily preventing clients who had accumulated gains from cashing out, some said Trading 212 failed to execute their stop-loss or take-profit orders. The company, in turn, claims the customers whose orders were canceled had violated its contract terms.
“Today we have settled with most of the affected clients,” Borislav Nedialkov, a co-founder of Trading 212, said Friday.
Justin Galvin, one of the Trading 212 customers battling to get what they see as their rightful profits, blamed the company for the situation, however. In statements, he argued the firm simply took too risky a strategy in offering the product in a nascent market.
Galvin said: […]