Crypto Exchanges Trade Blame Over $20 Billion Market Liquidation

Global markets tumbled on October 10 after US President Donald Trump announced a 100% tariff on Chinese imports, triggering panic across equities and digital assets.

Within minutes, a cascade of forced liquidations erased nearly $20 billion from crypto traders’ positions.

System Glitch or Market Manipulation?

The turbulence spread quickly through major centralized exchanges. Users on Binance and other platforms reported frozen dashboards, failed stop-loss triggers, and flash crashes that briefly sent several tokens toward zero.

The disruptions sparked frustration across trading communities. Many traders questioned whether the crypto exchanges’ systems had malfunctioned or if deeper market manipulation was at play.

Considering this, Crypto.com CEO Kris Marszalek called for an independent review of exchanges that experienced the heaviest liquidations during the market crash. He said billions in users’ funds vanished overnight, and regulators must act to protect them.

Regulators should look into the exchanges that had most liquidations in the last 24h and conduct a thorough review of fairness of practices. Any of them slowing down to a halt, effectively not allowing people to trade? Were all trades priced correctly and in line with indexes?…

— Kris | Crypto.com (@kris)

Meanwhile, OKX CEO Star Xu weighed in by indirectly blaming Binance for the market situation.

According to him, when an exchange “steps onto the field” by inflating token prices, using multiple affiliated identities, and exploiting user sentiment through hype campaigns, it erodes trust and ultimately destroys itself.

Xu’s comments also recalled past controversies—most notably FTX’s 2022 collapse. Notably, the defunct exchange had accused Binance of accelerating its downfall with public statements and a rushed withdrawal of support.

“‘Fired the shot’ that took down FTX may have succeeded in eliminating a competitor, but what followed wasn’t an expansion of their own market share — it was a systemic collapse of the entire industry, and a series of even more dramatic ‘lives.’ In that chain reaction, there were no real winners,” Xu said.

Was Binance Targeted During Market Collapse?

Meanwhile, crypto KOLs like Wu Blockchain alleged that the crash may have been caused by vulnerabilities in Binance’s Unified Account system.

This system allows users to post different assets—including USDE, wBETH, and BnSOL—as collateral for leveraged trades. When those assets lose their pegs, margin requirements rapidly increase, triggering a chain of automated liquidations.

So, as the collateral values plunged—USDE to $0.65, wBETH to $0.20, and BnSOL to $0.13—many traders on the crypto exchange saw their positions wiped out despite hedging strategies.

It added that algorithmic bots further accelerated the downturn by executing sell orders across exchanges, intensifying volatility.

The wave of failures renewed long-standing concerns over exchange transparency and liquidity practices, particularly during periods of extreme stress.

“Another piece of evidence suggesting the attack was premeditated is the timing—it occurred precisely between Binance’s announcement of an oracle price adjustment and the actual implementation. The announcement was made on October 6, with the change scheduled for October 14, providing attackers with a clear window of opportunity,” Wu Blockchain reported.

Yesterday, BeInCrypto also noted hundreds of tweets from users who were unable to trade, withdraw their assets, or even activate stop-loss during the market crash.

Hundreds of Binance users say they missed trades or couldn’t withdraw funds during yesterday’s crypto crash.A flood of posts now accuse @binance of market manipulation and system freezes.Outages during critical market moments only deepen distrust in centralized exchanges.…

— BeInCrypto (@beincrypto)

Amid all these issues, Binance has apologized to its impacted users and promised to reimburse them.

In a statement, Binance co-founder Yi He blamed the situation on “extraordinary market turbulence and user surges” that disrupted normal operations.

He promised a case-by-case review for users who could prove they suffered technical losses. However, she clarified that unrealized profits or price-driven losses would not qualify for compensation.

“The reason Binance is Binance is that we never shy away from problems. When we fall short, we take responsibility—there are no excuses or justifications. We are committed to serving every user to the best of our ability, and we will manage what we are responsible for,” she added.