Users affected by collateral liquidations, Earn products, and transfer delays received full refunds within 24 hours.
Binance has announced that it has compensated affected users with approximately $283 million following the recent October 10 market meltdown.
The company also shared that the situation had been caused by a brief technical glitch on the same day that resulted in temporary disruptions and de-pegging in some cryptocurrencies.
What Really Happened During the Crash
On October 12, the exchange released a statement explaining the extreme price swings that took place after global economic events triggered heavy sell-offs across the cryptocurrency market.
The crash had traders panic-selling across several platforms, leading to over $7 billion in liquidations in the first hour. As a result, Bitcoin, Ethereum, and other major digital assets plunged, while synthetic tokens like USDE and BNSOL lost their pegs.
However, Binance said it compensated affected users within 24 hours and later determined that its platform played only a minor role in the overall decline.
“The forced liquidation volume processed by Binance platform accounted for a relatively low proportion to the total trading volume, indicating that this volatility was mainly driven by overall market conditions,” the company said.
Customers who lost funds through collateral liquidations were fully reimbursed, while those affected by delays in internal transfers or Earn product redemptions will also receive refunds.
In total, the crypto giant paid out $283 million to users impacted by the de-pegging of its Earn products tied to USDE, BNSOL, and WBETH. It also clarified that the crash happened before the peg disruption, not because of it.
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“The extreme market downturn occurred before the de-pegging. Records show that during the market sell-off, prices fell to their lowest point between 2025-10-10 21:20 and 21:21 (UTC), while the severe de-pegging occurred after 21:36 (UTC) on the same day,” read the statement.
Binance Addresses Sudden Price Drops
There have also been concerns about sudden price drops in some spot trading pairs. Binance claimed it had carried out investigations which revealed that the declines happened when old limit orders, some placed as far back as 2019, were triggered during the sell-off at a time when there were very few buy orders. This caused brief moments where certain token prices nosedived before returning to normal levels.
The statement also explained that the “zero price” seen in pairs like IOTX/USDT was a display issue caused by recent changes to the number of decimal places allowed for price movements.
Binance said it is now fixing the user interface and improving its systems to prevent similar problems in the future. The company confirmed that its API was not affected during the incident and emphasized its commitment to transparency and ongoing system improvements.
Friday’s market dip is now considered the largest liquidation event in cryptocurrency history. Triggered by President Trump’s threat of a 100% tariff on Chinese tech imports, the event wiped out over $19 billion in leveraged positions within 24 hours, impacting more than 1.6 million traders globally.
The incident erased nearly $1 trillion in market capitalization within three hours, with analysts noting that the size of sell-offs surpassed previous collapses like Terra Luna and FTX.
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