Binance Announces Some User Compensation After $20 Billion Market Crash

Binance, the world's largest cryptocurrency exchange, announced Saturday it will compensate users who lost money during a major market crash on October 10, 2025.

The incident saw three digital tokens lose their value suddenly, triggering massive liquidations across the platform.

The crash happened during one of the worst days in crypto history. Nearly 1.7 million traders were liquidated within 24 hours, wiping out about $19.3 billion in trading positions. Binance recorded $1.4 billion in long positions and $981 million in short positions erased during the chaos.

What Caused the Depegging

Three tokens experienced dramatic price drops on Friday night. USDe, a stablecoin designed to stay at $1, fell to $0.66. BNSOL, Binance’s Solana staking token, crashed to $34.90. WBETH, a wrapped Ethereum staking token, dropped to $430.65.

The incident occurred between 21:36 and 22:16 UTC on October 10. These sudden price changes happened as the broader crypto market crashed following President Trump’s announcement of 100% tariffs on Chinese imports starting November 1.

The total cryptocurrency market lost nearly $200 billion in value within hours. Bitcoin fell from $122,000 to below $110,000. Ethereum, XRP, and other major cryptocurrencies saw similar steep declines.

Binance’s Response and Apology

Binance co-founder Yi He apologized to users on Saturday morning. She explained that problems arose from extreme market volatility combined with a huge influx of users to the platform. This caused the exchange’s systems to experience performance issues.

Source: @heyibinance

“If you have incurred losses attributable to Binance, please contact our customer service to register your case,” He wrote on X (formerly Twitter).

CEO Richard Teng also issued a public apology. “I’m truly sorry to everyone who was impacted. We don’t make excuses — we listen closely, learn from what happened, and are committed to doing better,” he stated.

Teng took over as CEO from Binance founder Changpeng “CZ” Zhao in 2023. His handling of this crisis represents a major test of his leadership.

Who Gets Compensated

Binance announced specific criteria for compensation. All Futures, Margin, and Loan users who held USDe, BNSOL, or WBETH as collateral during the 40-minute depegging window will receive automatic payments.

The compensation amount equals the difference between the market price at midnight UTC on October 11 and each user’s liquidation price. Binance said these payments would be distributed directly to user accounts within 72 hours.

Users who experienced losses from platform latency issues will have their cases reviewed individually. Wealth management users affected by the three depegged tokens will also receive compensation through a gradual process.

However, not everyone qualifies. Binance made clear that losses from normal market movements and unrealized profits don’t qualify for compensation.

In a notable decision, Binance said users who bought the depegged tokens at bargain prices during the crash can keep them. “Those who acquired depegged assets at low prices yesterday earned them by staying up late, and we will not reclaim those,” He wrote.

New Safety Measures

Binance announced three technical changes to prevent similar incidents. First, redemption prices will be added to the index weights for BNSOL, WBETH, and USDe. Second, a minimum price threshold will be introduced for the USDe index to increase stability. Third, the exchange will review risk control parameters more frequently to respond faster to market conditions.

The exchange also confirmed that its systems had experienced high loads due to intense market activity but said the issues were resolved.

BNB, Binance’s native token, dropped 9.6% during the 24-hour period. The token had recently become the third-largest cryptocurrency by market value, surpassing XRP.

Industry Reactions

The incident sparked debate about exchange stability and risk management. Crypto.com CEO Kris Marszalek called for regulatory oversight. “Regulators should look into the exchanges that had most liquidations in the last 24h and conduct a thorough review of fairness of practices,” he wrote. “$20B in liquidations, a lot of users got hurt.”

Some analysts suggested the event may have been a targeted exploit. They pointed to how Binance’s unified account system allows traders to use multiple types of collateral. When the tokens depegged, the collateral values collapsed, triggering automatic liquidations across thousands of accounts.

The Ethena team, which created USDe, defended their token. They said the price fluctuations resulted from market volatility and increased liquidations, not problems with their system. They emphasized that USDe’s issuance and redemption system operated normally throughout the incident.

The Path Forward

The incident demonstrates the risks of leveraged trading during extreme market volatility. It also highlights the challenges exchanges face when managing multiple types of collateral during rapid market movements.

Binance’s quick response and willingness to compensate affected users may help maintain trust. However, the sheer scale of liquidations—nearly $20 billion across the industry—raises questions about whether existing risk management systems are adequate for handling major market shocks.

The exchange’s new prevention measures and commitment to more frequent risk reviews suggest it takes these concerns seriously. Whether these changes prove sufficient will become clear the next time markets face extreme stress.