The October Crypto Crash: Macro Forces, Not a Binance Glitch

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Binance is muttering its protests into the wind, insisting October’s crypto flash crash wasn’t a slip of the exchange but the stubborn weather of macro shocks, tightened leverage, and the stubborn, wandering liquidity that drags markets along the same dirt road as crypto and stocks alike.

Binance Denies Glitch, Points to Macro Pressure for October Crypto Crash

When the earth tilts, stories sprout like weeds. Binance published a blog on January 30, laying down its version: it wasn’t a sly glitch that wrought the October stumble, but the stubborn laws of macroeconomics and the shape of markets that pulled both crypto and stock prices down the same tired road.

“On October 10, 2025, the crypto markets were bucked by a macro storm. Folks pointed at a Binance hiccup, but the truth wore a heavier coat: cascading liquidations fed on reckless leverage, the risk controls of market makers clamped down on liquidity, and Ethereum jams slowed the flow of coins like a stubborn river over a blocked dam,” the post says.

It explains how headlines about trade wars turned the markets into a single tired animal, steering funds away as prices rose on hope and debt, then snapped back. Bitcoin futures and options had gathered more than a hundred billion tucked into their pockets, ready perhaps for a sudden exit. When prices slipped, the automated railings that market makers set up slammed shut, and liquidity slipped from the order books like water through a cracked dam, and the whole thing spilled out in one thunderous display. The note insists the tremor wasn’t confined to digital coins, but rode out into the wider field, with a quiet emphasis:

“The impact wasn’t confined to crypto: U.S. equity markets shed roughly $1.5 trillion in value that day, with the S&P 500 and Nasdaq enduring their largest single-day drops in six months and $150 billion in systemic liquidations.”

The crypto platform argues against the claim that a glitch in its systems caused the crash. The blog says the October 10 dislocation was systemic and macro-driven, but it concedes some Binance components felt the strain and has compensated the affected users, while bolstering safeguards.

It emphasizes:

“Importantly, Binance’s platform-specific issues did not cause the flash crash.”

“With the most fevered moment of up and down between 21:10-21:20 UTC, roughly 75% of the day’s liquidations had already occurred before the widely reported three-token depeg (USDe, BNSOL, WBETH) appeared at 21:36 UTC,” Binance added.

Independent data from Kaiko and Amberdata show that while macro events sparked the initial dip, a localized oracle failure on Binance accelerated the collapse. Between 21:36 and 22:16 UTC, USDe crashed to $0.65 exclusively on Binance while remaining stable at $0.99 elsewhere. The phantom depeg occurred because the pricing engine fed on the exchange’s own internal spot books, which had thinned out, rather than global market aggregates. This revalued the collateral for users in the Unified Account system at artificial price points, triggering a secondary wave of liquidations.

The company details two contained incidents involving a brief slowdown in an internal asset-transfer subsystem and short-lived index deviations during periods of severely thinned liquidity, both resolved through infrastructure upgrades, tighter index methodology, and full user compensation exceeding $328 million. Binance also points to additional goodwill and lending initiatives as evidence of a proactive, user-focused response rather than a defensive explanation.

FAQ ⏰

  • What caused the October crypto flash crash, according to Binance?
    Binance says macro shocks, high leverage, and liquidity withdrawal-not a platform glitch-triggered cascading liquidations.
  • Did Binance admit to any platform issues during the crash?
    Binance acknowledged temporary strain under extreme conditions and said all affected users were fully compensated.
  • How much leverage was in the crypto market before the sell-off?
    Binance notes Bitcoin futures and options open interest topped $100 billion in the run-up.
  • Why is the three-token depeg not treated as the trigger?
    The exchange says most liquidations happened before USDe, BNSOL, and WBETH slid.

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2026-02-01 09:52