Margin lenders on American cryptocurrency exchange Poloniex have lost around $13.5 million due to a flash crash. Poloniex announced about the incident in a blog post published on June 6.

Poloniex revealed that on May 26 a severe price crash in the clams (CLAM) market led to margin loans losses amounting to roughly 1,800 bitcoin (BTC), or approximately $13.5 million at the time. The incident affected 0.4% of all users and resulted in the reduction of all active BTC loans by 16.202%.

The exchange subsequently froze all of the defaulted borrowers’ accounts and will keep them frozen until the borrowers repay their loans. Poloniex also claims that it will return the funds to affected lenders as soon as it recovers the lost money. Poloniex suggested that the crash occurred due to a number of reasons, and further explained:

“The velocity of the crash and the lack of liquidity in the CLAM market made it impossible for all of the automatic liquidations of CLAM margin positions to process as they normally would in a liquid market. In addition, 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.”

Last month, Poloniex stopped offering trading in nine coins to customers in the United States. The exchange stated that the decision was motivated by the uncertain regulatory environment in the country, “Specifically, it is not possible to be certain whether U.S. regulators will consider these assets to be securities.”

In January, independent analysts at ICORating gave 16% of the world’s biggest cryptocurrency trading platforms an A rating, including Poloniex (A-) among the top three most secure exchanges globally.

ICORating assessed 135 crypto trading platforms, all of whose daily trade value reportedly exceeds $100,000, on the basis of four security categories: user account security, registrar and domain security, web security and DoS attack protection.