On October 10, 2025, Binance users watched their accounts drain as three digital assets lost value in minutes. USDe, a stablecoin designed to stay at $1, crashed to $0.65.

Two other tokens—BNSOL and WBETH—also plummeted. Within 40 minutes, nearly 1.7 million traders were liquidated, wiping out $19.3 billion across the crypto market.

Now analysts are asking: was this a simple market crash, or something more calculated?

The Oracle Problem

The root of the disaster lies in how Binance determined prices for these tokens. Unlike other exchanges, Binance used its own internal orderbook—essentially the buy and sell orders on its platform—to set prices for margin trading. This created a problem when trading volume got thin.

Guy Young, founder of Ethena Labs (which created USDe), explained that the depeg happened because Binance’s pricing system relied on its own limited liquidity instead of checking prices across multiple major exchanges. While USDe stayed above $0.90 on other platforms, it crashed to $0.65 on Binance.

Source: @gdog97_

The same pattern hit BNSOL and WBETH. These tokens collapsed on Binance while holding steady elsewhere. WBETH dropped 88.7% below Ethereum’s value on Binance alone.

A Suspicious Window

Here’s where timing becomes interesting. On October 6, Binance announced plans to fix this exact problem. The exchange said it would switch from using its own orderbook prices to more reliable external data sources. The change was scheduled for October 14.

The crash happened on October 10—right in the middle of that eight-day window.

Colin Wu, a crypto journalist, pointed out this timing wasn’t random. Between the announcement and the planned fix, attackers had a clear opportunity. Binance’s risk team knew about the vulnerability but hadn’t closed it yet.

How the Attack Worked

Binance’s Unified Account system lets traders use different types of assets as collateral for leveraged trades. This includes yield-bearing tokens like USDe, BNSOL, and WBETH. When these assets lost value, the collateral backing traders’ positions evaporated.

Forgiven, an executive at Conflux network, described how the damage spread. As Bitcoin and other cryptocurrencies fell (triggered by President Trump announcing 100% tariffs on China), traders who used these tokens as collateral saw their margin requirements spike. Automated systems began liquidating positions to cover losses.

The liquidations created a downward spiral. Market makers—large traders who provide liquidity—were forced to dump their holdings to survive. This pushed prices even lower, triggering more liquidations.

Within 24 hours, trading volume for the three affected tokens hit $3.5 to $4 billion on Binance. Estimated losses ranged between $500 million and $1 billion.

The Whale in the Room

Blockchain data revealed another piece of the puzzle. A trader began building massive short positions on Hyperliquid—a decentralized exchange—starting October 9. This trader, controlling over 100,000 Bitcoin, opened a $752.9 million short on Bitcoin and a $353.1 million short on Ethereum.

The timing raised eyebrows. The trader doubled down on these bets just 30 minutes before Trump’s tariff announcement sent markets tumbling. The whale closed most positions the next day, walking away with $190-$200 million in profit.

Ethena Defends Its Protocol

Young emphasized that USDe itself didn’t fail. The token’s underlying system for creating and redeeming coins worked throughout the crash. About $2 billion in USDe was redeemed across other platforms like Curve and Uniswap, with prices staying within 0.3% of $1.

On-chain data from Aave, a lending platform, showed USDe maintaining its $1 peg outside of Binance. The problem was isolated to Binance’s internal pricing system.

“No one would have been liquidated on any money market with oracles referencing the deepest pools of liquidity,” Young said.

Binance’s Response

Binance acted quickly. Co-founder Yi He and CEO Richard Teng both apologized publicly. The exchange announced compensation for users who held USDe, BNSOL, or WBETH as collateral during the 40-minute crash window.

Payouts equal the difference between the market price at midnight on October 11 and each user’s liquidation price. Binance said it would distribute these payments within 72 hours.

The exchange also announced three fixes: adding redemption prices to the index calculations for all three tokens, setting a minimum price threshold for USDe, and reviewing risk controls more often.

Source: @binance

Crypto.com CEO Kris Marszalek called for regulators to investigate exchanges with high liquidation volumes, noting that $20 billion in losses hurt many users.

The Verdict Remains Open

Was this a coordinated attack or an unfortunate convergence of bad timing and system flaws? The evidence points both ways.

The suspicious timing, venue-specific price crashes, and whale activity suggest planning. The fact that only the three pre-announced vulnerable assets crashed so dramatically—while similar tokens like BUSD held steady—adds weight to the attack theory.

Yet proving coordination requires more than circumstantial evidence. Market crashes can look deliberate when they exploit known weaknesses, even if no coordination exists.

What’s clear is that Binance’s decision to use internal orderbook pricing for collateral liquidations created a dangerous vulnerability. When combined with thin liquidity and high leverage, the system became a powder keg waiting for a spark. Whether someone lit the match deliberately or it caught fire on its own may never be fully known.