The crypto market was thrown into chaos Friday after US President Donald Trump threatened to impose 100% tariffs on China and new export controls on software. In a market already stretched by heavy leverage, the announcement led to one of the biggest selloffs in years.
The selloff snowballed into a $19 billion wave of liquidations as overleveraged bets were wiped out in hours. In what was called “the largest liquidation event in crypto history,” CoinGlass data showed more than 1.6 million traders were liquidated in 24 hours, with $7 billion flushed in a single hour.
Bitcoin price, which had reached an all-time high of $125,000 earlier this week, plunged 16%, falling below $105,000 briefly. It recovered on Saturday to $112,000. Altcoins suffered heavy losses, tumbling between 30% AND 80%.
Binance to compensate losses caused by its system
As liquidations mounted, many users of centralised crypto exchanges reported failed orders, with some traders saying they were unable to close positions before blowups.
In the wake of the chaos, Binance, one of the top exchanges, acknowledged the disruptions on its platform linked to the surge in volume and said it would review and compensate losses directly caused by its system failures.
“Due to significant market fluctuations over the past 16 hours and a substantial influx of users, some users have encountered issues with their transactions,” Yi He, Binance’s co-founder and chief customer service officer, said in a statement on Saturday.
“If you have incurred losses attributable to Binance, please contact our customer service to register your case. We will review your account activity individually, analyze the situation, and provide compensation accordingly.”
Binance would not compensate “losses resulting from market fluctuations and unrealized profits are not eligible for compensation,” she said.
DeFi protocols break records — without disruptions
While centralised exchanges were under strain, several DeFi protocols processed record volumes without any reported issues.
Largest decentralised exchange Uniswap has reached a record-high daily trading volume of $10 billion, according to data from DefiLlama.
Top lending protocol Aave handled over $180 million in collateral liquidations within an hour in what the protocol’s founder Stani Kulechov called “the largest stress test of its $75B+ lending infrastructure.”
The protocol’s fees rose up to $15 million over the past day, up from its recent daily average of $3 million, DefiLlama data shows.
“That stress test was wild, but DeFi worked flawlessly,” Michael Bentley, co-founder of another top lending protocol Euler, said. “No emergency circuit breakers. No regulatory interventions. Just free markets and code.”
DeFi liquidations amounted to only a few hundred million dollars — a small share of the total $19 billion wiped out across markets. Yet that’s still a record for the nascent industry.
