In the past 24 hours, the cryptocurrency market experienced a record liquidation of $20 billion. Crypto.com CEO Kris Marszalek urged regulators to investigate exchange practices during this volatile period. Highlighting concerns on social media, Marszalek emphasized the necessity for in-depth examinations of fair trading practices, questioning whether exchanges committed errors in pricing, transaction slowdowns, or preventative measures against manipulation during the market crash.
Binance Vows Compensation to Affected Users
According to CoinGlass data, Hyperliquid faced the most significant liquidation, wiping out positions worth $10.31 billion. Bybit followed with $4.65 billion, and Binance saw $2.41 billion in liquidations. Meanwhile, other major exchanges like OKX, HTX, and Gate recorded losses of $1.21 billion, $362.5 million, and $264.5 million, respectively.
Binance confirmed that the price divergence concerning Ethena’s USDe, BNSOL, and WBETH tokens led some users to mandatory liquidations. The company is reviewing the affected accounts and stated that compensations would be made where considered appropriate.
Yi He, Binance co-founder, publicly apologized to users for the inconvenience, assuring that losses from platform errors would be compensated. However, losses due to market volatility would not qualify for compensation.
Trump’s Tariff Shock Shakes Markets
Crypto analyst Quinten François noted that the recent crash surpassed all past liquidations, with a staggering $19.31 billion in liquidations, far exceeding the $1.2 billion during the COVID-19 crash and the $1.6 billion during the FTX collapse.
Behind the market crash were also the harsh tariff plans announced by U.S. President Donald Trump on Chinese imports. Trump declared a 100% tariff on all imports from China from November 1, as a response to China’s move to limit the export of rare earth elements. Recently, Beijing required export licenses for products containing more than 0.1% rare earth elements.
In summary, the massive wave of liquidations in the crypto market has significantly shaken investor confidence. Technical errors and suspicions of unfair practices at centralized exchanges may lead to increased regulatory pressure. Combined with Trump’s economic maneuvers, this volatility may hinder market stability in the short term, urging investors to tread cautiously and avoid highly liquid positions.
