- The crypto selloff sparked record $19 billion in liquidations and chaos on the stock exchanges.
- Binance promises payouts after system outages during a stock market crash.
- DeFi protocols have shined under the pressure, processing record volumes without interruption.
The crypto market was thrown into chaos on Friday after US President Donald Trump threatened to impose 100% tariffs on China and new software export controls. In a market already strained by high debt, the announcement led to one of the biggest sell-offs in years.
The selloff turned into a $19 billion liquidation wave as overleveraged bets were wiped out within hours. In what has been called “the largest liquidation event in crypto history,” CoinGlass data showed that more than 1.6 million traders were liquidated in 24 hours, with $7 billion drained in a single hour.
The price of Bitcoin, which had hit an all-time high of $125,000 earlier this week, plunged 16%, briefly falling below $105,000. It recovered on Saturday to $112,000. Altcoins suffered heavy losses, falling between 30% AND 80%.
Binance will compensate for losses caused by its system
As liquidations mounted, many users of centralized crypto exchanges reported failed orders, with some traders saying they were unable to close their positions before the explosion.
Following the chaos, Binance, a leading exchange, acknowledged disruptions on its platform related to increased volumes and said it would review and compensate for losses directly caused by its system outages.
“Due to significant market fluctuations over the past 16 hours and a large influx of users, some users experienced issues with their transactions,” Yi He, co-founder and head of customer service at Binance, said on Saturday.
“If you have suffered losses attributable to Binance, please contact our customer support to register your case. We will review your account activity individually, analyze the situation, and provide compensation accordingly.”
Binance would not compensate “losses resulting from market fluctuations and unrealized profits are not eligible for compensation,” it said.
DeFi protocols are breaking records – without interruption
While centralized exchanges were under pressure, several DeFi protocols processed record volumes with no reported issues.
The largest decentralized exchange, Uniswap, reached a record daily trading volume of $10 billion, according to data from DefiLlama.
Leading lending protocol Aave processed more than $180 million in collateral liquidations in an hour in what protocol founder Stani Kulechov called “the largest stress test of its more than $75 billion lending infrastructure.”
The protocol’s fees increased by up to $15 million over the past day, compared to the daily average of $3 million, according to DefiLlama data.
“This stress test was wild, but DeFi worked flawlessly,” said Michael Bentley, co-founder of another leading lending protocol, Euler. “No emergency circuit breakers. No regulatory interventions. Just free markets and code.”
The DeFi liquidations amounted to only a few hundred million dollars, a small portion of the total $19 billion wiped out in the markets. However, this remains a record for this emerging industry.
Ekin Genç is the editor-in-chief of DL News based in Oxford, UK. Do you have any advice? Email ekin@dlnews.com
