– $19-$20 billion crypto wiped in 24-hour sell-off – Alleged Binance margin system flaw exploited, claims research chief – Binance commits to compensating affected users – Market cap recovers to $3.87 trillion
The crypto market experienced a significant sell-off on October 10–11, resulting in an estimated $19–20 billion loss within 24 hours. Key points include:
- Dr. Martin Hiesboeck from Uphold suggested the crash was a targeted attack exploiting a flaw in Binance's Unified Account margin system.
- The issue involved assets like USDe, wBETH, and BnSOL being used as collateral with liquidation prices based on volatile internal markets rather than external data.
- Binance acknowledged price dislocations during this period and committed to compensating affected users for losses incurred between October 10, 21:36 UTC and October 11, 22:16 UTC.
- The depegging of assets led to forced unwinds and further losses, with USDe dropping to approximately $0.65.
- The crash was initially triggered by macroeconomic factors, specifically new US tariff threats against China, which caused cross-asset risk-off behavior.
- The event marked the largest single-day liquidation, with around $20 billion liquidated, including over $1.2 billion on Hyperliquid.
- Critics argue that Binance's design flaw allowed internal spot pairs to become unstable, leading to a reflexive loop of sales and further liquidation.
- Binance plans to adjust pricing logic for wrapped assets and has started compensating users who suffered verified losses.
At present, the total crypto market cap has recovered to $3.87 trillion.
