en.bitcoinsistemi.com
Binance has released a comprehensive statement regarding the sudden crash in the cryptocurrency market on October 10th.
The company stated that the sharp decline was primarily due to macroeconomic developments, market makers’ risk protocols, and congestion on the Ethereum network, while arguing that two platform-specific technical issues did not cause the crash.
The exchange stated that its matching engine, risk controls, and clearing systems operated without interruption during the process, and that there were no system failures or downtimes across the platform.
According to Binance, a sharp sell-off occurred in global markets on October 10th, influenced by trade war headlines. The crypto market was more vulnerable to this shock due to the accumulation of highly leveraged positions following the rally that lasted until the beginning of October.
It was reported that open positions in derivative markets were approaching record levels, with the size of open positions in Bitcoin futures and options exceeding $100 billion. On-chain data showed that many Bitcoin investors were in profit, creating an environment that could trigger sudden profit-taking and forced liquidations.
The selling pressure wasn’t limited to cryptocurrencies. On the same day, US stock markets experienced a loss of approximately $1.5 trillion; the S&P 500 and Nasdaq recorded their sharpest daily declines in six months.
According to the statement, as sales accelerated, market makers activated algorithmic risk controls and circuit breakers. These mechanisms automatically withdraw liquidity to reduce inventory risk during periods of extreme volatility.
Citing Kaiko data, Binance stated that BTC liquidity on some exchanges had dropped to or near zero at certain levels, with buy orders virtually disappearing within a 4% price range. The decrease in liquidity in the examined order books caused each additional forced sale to push the price down more sharply than usual. Inter-exchange arbitrage and risk management were also disrupted during this process.
The congestion on the Ethereum network was also a significant factor during the outage. Gas fees jumped from single-digit levels to over 100 gwei at times, and block confirmation times lengthened. This slowed down inter-exchange fund transfers and arbitrage transactions.
In an already thin liquidity environment, delayed capital flows widened spreads and made position balancing more difficult. Binance stated that these conditions created a short-term “liquidity gap,” amplifying price movements.
Binance stated that the highest volatility occurred between 21:10 and 21:20, and approximately 75% of the liquidations during the day took place before the decline event in the three tokens ($USDe, BNSOL, WBETH) reported at 21:36.
The macro shock reportedly began around 20:50, with forced liquidations, accompanied by examined order books, accelerating the price decline. This timing, according to the exchange’s statement, reveals that the main trigger was not a platform error, but a market-wide spiral of risk aversion and liquidations.
The company also shared details of two internal platform issues that it claims did not cause the crash.
During peak trading hours, the subsystem facilitating fund transfers between Spot, Earn, and Futures wallets slowed down for approximately 33 minutes. While matching and risk controls continued to function, the issue was only observed at the transfer layer.
Some users temporarily saw their balances as “0” on the interface; this was described as a UI issue and no funds were lost.
During a period of thinning liquidity and slowing on-chain flows, abnormal deviations occurred in the index calculations of $USDe, WBETH, and BNSOL tokens. According to Binance, this was due to the excessive weighting of Binance order books in the index calculation and their insufficient tightness to the reference assets; furthermore, the deviation hedging parameters were not sufficiently stringent in the highly volatile market.
Following the “$0 wick” pattern that appeared on October 12th in the ATOM/$USDT and IOTX/$USDT pairs due to extremely low liquidity, it was announced that a front-end (UI) update was made to the K-line chart display. It was stated that this update was solely for visual optimization purposes and did not affect actual trading data.
Binance announced that as of October 22, 2025, it had paid over $328 million in compensation to all eligible users affected by both incidents.
*This is not investment advice.