Recently, Binance has found itself under scrutiny amidst a 10/10 campaign backed by its competitors. Many influencers and industry figures are attributing the crypto market‘s recent liquidity issues and decline to Binance, pointing to CEO Changpeng Zhao’s immense fortune and blaming the company for what is being dubbed as the “10/10 collapse.” The question arises: is Binance really to be blamed for this downturn? In response, Binance has issued a statement addressing these accusations.
Understanding Binance’s Official Statement
As the world’s largest cryptocurrency exchange by volume, Binance recently released a statement concerning the ongoing 10/10 campaigns. CEO Zhao denounced these claims as organized FUD (Fear, Uncertainty, Doubt) harming the overall market. So, what does Binance have to say in its defense?
“On October 10, 2025, the crypto market experienced a macro shock. While some linked this to an issue at Binance, it was actually triggered by cascading liquidations, macro risks from highly leveraged positions, risk controls by market makers limiting liquidity, and congestion within the Ethereum network delaying transfers.” – Binance
Binance explains each cause for the October 10 downturn. The day coincided with a trade war affecting U.S. stock markets, erasing $1.5 trillion. It noted that the S&P 500 and Nasdaq faced the largest single-day drop in six months with $150 billion in systemic liquidations.
“As selling intensified, extreme market movement triggered market makers’ algorithmic risk controls and circuit breakers, initiating automatic inventory management and risk reduction. While expected under extreme volatility, this behavior temporarily withdrew liquidity from order books.
Data from Kaiko’s order book depth (see image below) indicated that ‘BTC liquidity was nearly zero or nearly at every level’ on most major exchanges except Binance, Cryptocom, and Kraken. This decline meant each forced sale moved prices more than usual. Moreover, cross-exchange risk management and arbitrage were also disrupted.” – Binance
Binance emphasizes that all exchanges faced difficulties, and these were not exclusive to Binance. It also highlights that the Ethereum network’s congestion further exacerbated the collapse by slowing arbitrage and inter-platform flows.
Analyzing Binance’s Compensations and Clarifications
“The widening spreads in already weak markets created a short-term liquidity gap, complicating position balancing and increasing price volatility. Restoring balance among exchanges or reallocating liquidity to where it was needed most was difficult until selling pressure subsided and markets stabilized.” – Binance
While mechanical selling and forced liquidations heightened price movements, slowing arbitrage and cross-platform transfers widened temporary price differences. Weak liquidity and delayed capital flow also challenged Binance. The exchange stresses that similar or even worse challenges were faced by all exchanges during extreme market conditions.
So, why did Binance make compensation payments? Binance offers this explanation.
“The October 10 collapse resulted from precautionary risk evasion prompted by systemic macroeconomic factors. However, Binance acknowledges that certain segments of its platform faced temporary pressure under extreme market conditions and compensated affected users while bolstering security measures.” – Binance
Binance addressed claims that liquidations were Binance-centric.
“Issues unique to Binance’s platform did not cause the sudden collapse. The highest volatility range was between 21:10-21:20 UTC, with roughly 75% of the day’s liquidations occurring before the widely reported de-pegging of three tokens (USDe, BNSOL, WBETH) at 21:36 UTC. This timing indicates most leverage reduction occurred during the initial macro shock beginning at 20:50 UTC. During this shock, forced liquidations accelerated price declines amid shrinking order books.
This confirms that the main factor was market-wide risk aversion and liquidation reflexes rather than platform-related anomalies. Binance’s core matching engine, risk controls, and clearing systems continued to function seamlessly.”
Is Binance completely in the clear? Two critical issues required compensations, which have been addressed.
“Incident 1: Disruption in the Asset Transfer Subsystem (21:18-21:51 UTC)
During peak selling, our internal asset transfer subsystem slowed for about 33 minutes. This affected some fund transfers between Spot, Earn, and Futures. Core matching, risk controls, and clearing operations continued; the disruption was limited to the transfer path and related processes. A small number of users saw their balances displayed as ‘0’ on the user interface when backend calls failed; this wasn’t a fund loss, but a display issue.
Incident 2: Index Deviations for USDe, WBETH, and BNSOL (21:36-22:15 UTC)
After market-wide order book depth decreased and congestion slowed cross-platform balancing, USDe, followed by WBETH and BNSOL indexes, deviated abnormally from expected values. Reduced local liquidity, accelerating liquidations, and slowing cross-platform flows caused temporary movements on our platform to weigh heavily in index calculations during stress periods.”
By October 22, 2025, the exchange refunded $328 million to eligible users impacted by the two incidents mentioned above and initiated a $300 million goodwill program for other affected users. These topics had already been discussed in October.
In conclusion, Binance acknowledges its imperfections but states that all affected by these two issues received compensation.
