Binance confirmed it has compensated users with $283 million after a chaotic market downturn on Friday. The downturn led to a wave of de-pegging among several of its platform tokens and forced liquidations for thousands of traders.
The exchange’s rapid response came in the wake of extreme volatility that erased nearly $20 billion in leveraged crypto exposure. Additionally, it prompted renewed scrutiny of centralized exchange safety and transparency.
Crypto Market Downturn
On October 11, 2025, sharp global selloffs sent Bitcoin and other digital assets plunging. Within minutes, the synthetic dollar token USDe, the Binance Solana liquid staking asset BNSOL, and the Wrapped Beacon Ethereum (WBETH), all used as collateral within Binance Earn, lost their pegs, trading far below intended values.
USDe, for example, briefly crashed to $0.66. Many users employing these assets as margin for futures or loans found positions suddenly liquidated due to the system recognizing rapid, steep price drops.
Adding to the confusion, several spot pairs, such as IOTX/USDT and ATOM/USDT, displayed prices of zero as a result. However, Binance later attributed the display glitch to recently changed decimal parameters and long-standing dormant limit orders.
Screenshots of tokens at $0 rapidly circulated online, fueling panic about a technical exploit or platform malfunction —fears that Binance moved swiftly to address.
Binance Responds Swiftly
Amid mounting pressure, Binance’s review concluded that the volatility was primarily driven by macroeconomic factors and external sell pressure, not by exchange malfunction. However, technical failures in how certain tokens handled abrupt price swings and illiquidity triggered a de-pegging event, delaying some Earn product redemptions and internal transfers.
Recognizing its role in these cascading margin calls, Binance issued compensation in two batches, totaling $283 million, to help users who suffered liquidations or losses between 21:36 and 22:16 UTC on Friday. Binance’s CEO publicly apologized, stating that rebuilding trust and improving risk controls are now high priorities.
Despite the turmoil, Binance’s quick payout for affected traders stabilized sentiment. BNB and other major coins rallied over the weekend, with the broader crypto market recovering a portion of its losses. The episode stands as a painful lesson in the risks of on-platform leverage, asset-pegged products, and the responsibilities of exchanges in turbulent markets.
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