Binance Faces Blame for Crypto Flash Crash Events

On October 11, a crypto flash crash dubbed “Crypto Black Friday” wiped out $19 billion, involving key exchanges like Binance and OKX, prompting high-profile industry reactions.

The incident has raised concerns over exchange infrastructure and decision-making, affecting major cryptocurrencies and exposing vulnerabilities in the market’s stability and risk management strategies.

Binance’s Role in $19 Billion Market Liquidations

The crypto flash crash on October 11 saw notable figures step forward to discuss its origins. He Yi, Co-CEO of Binance, addressed the situation, remarking that those trading on Binance understood the circumstances better as the situation unfolded. OKX CEO Star accused Binance’s activities as a catalyst for the crash.

The event caused about $19 billion in liquidations, severely impacting altcoin market pairs. Formerly stable assets, such as USDe and WBETH, depegged significantly. BTC and ETH prices dropped dramatically, reinforcing market instability perceptions among market observers.

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Community reactions were swift and intense. While Binance was scrutinized, Wintermute’s founder contended against exclusively blaming a single exchange. He highlighted that referring to the crash as a “software failure” was insufficient, emphasizing infrastructure issues as significant factors.

Analysis: Vulnerabilities and Future Risk Mitigation

Did you know? The October 11 “Crypto Black Friday” joins events like “312” and “519” as pivotal crypto market disruption days, with liquidations surpassing $19 billion.

Ethereum (ETH), as reported by CoinMarketCap, faced a 1.53% drop in 24 hours, with a current price of $2,693.67. Market dominance stands at 11.21%, with a market cap of approximately 317,189,549,531. The 90-day price drop of 30.55% exemplifies enduring volatility concerns.

The Coincu research team identifies potential market corrections as liquidity balances restore. Technological upgrades, including improved exchange infrastructure and ADL mechanism adjustments, are advised to mitigate future risks. Continuous regulatory vigilance is encouraged by analysts to address systemic vulnerabilities.

Star, CEO of OKX, remarked: “The crypto flash crash on October 11 was caused by Binance’s irresponsible USDe financial activities.”