Binance Explains Market Crash, Refunds Users $283 Million

Users affected by warranty clearances, Earn products, and transfer delays received a full refund within 24 hours.

Binance announced that it has compensated affected users with approximately $283 million following the recent market crisis on October 10.

The company also said that the situation was caused by a brief technical glitch that occurred on the same day, leading to temporary disruptions and unpegging of some cryptocurrencies.

What really happened during the crash

On October 12, the exchange released a statement explaining the extreme price swings that took place after global economic events triggered heavy selling in the cryptocurrency market.

The crash caused traders to panic sell on multiple platforms, leading to more than $7 billion in liquidations in the first hour. As a result, Bitcoin, Ethereum and other major digital assets plunged, while synthetic tokens like USDE and BNSOL lost their foothold.

However, Binance said it compensated affected users within 24 hours and later determined that its platform played only a minor role in the overall decline.

“The forced liquidation volume processed by the Binance platform represented a relatively small proportion compared to the total trading volume, indicating that this volatility was primarily due to overall market conditions,” the company said.

Customers who lost funds due to collateral liquidation have been fully refunded, while those affected by delays in internal transfers or redemptions of Earn products will also receive refunds.

In total, the crypto giant paid out $283 million to users affected by the unbundling of its Earn products linked to USDE, BNSOL, and WBETH. He also clarified that the accident had occurred before the breakdown of the connection, and not because of it.

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“The extreme market slowdown occurred before the depeg. Records show that during the market sell-off, prices fell to their lowest point between 2025-10-10 9:20 p.m. and 9:21 p.m. (UTC), while the severe depeg occurred after 9:36 p.m. (UTC) on the same day,” the statement read.

Binance faces sudden price drops

Concerns have also been raised over sudden price drops in some spot trading pairs. Binance claimed to have conducted investigations that found the declines occurred when old limit orders, some placed as far back as 2019, were triggered on the sell-off at a time when there were very few buy orders. This caused brief moments where some token prices fell before returning to normal levels.

The statement also explains that the “zero price” seen in pairs like IOTX/USDT was a display issue caused by recent changes to the number of decimal places allowed for price movements.

Binance said it is currently repairing the user interface and improving its systems to avoid similar issues in the future. The company confirmed that its API was not affected during the incident and emphasized its commitment to transparency and continuous improvement of the system.

Friday’s market drop is now considered the largest liquidation event in cryptocurrency history. Sparked by President Trump’s threat to impose 100% tariffs on Chinese technology imports, the event wiped out more than $19 billion in leveraged positions in 24 hours, impacting more than 1.6 million traders worldwide.

The incident wiped out nearly $1 trillion in market capitalization in three hours, with analysts noting that the scale of the sell-off exceeded previous collapses like Terra Luna and FTX.