The historic crash known as Crypto Black Friday wiped out over $19.5 billion in leveraged positions within hours, raising serious questions about what happened behind the scenes.
Initially seen as a market panic triggered by US tariff news, many analysts now suspect this was not merely a sell-off but a coordinated and sophisticated market manipulation.
Unusual Patterns and Growing Suspicion of Market Manipulation
The massive sell-off that shook the crypto market on October 10–11, 2025, dubbed Crypto Black Friday by the community, has become one of the most dramatic events in the industry’s history. Within a few hours, the market liquidated $19.5 billion in leveraged positions, sending Bitcoin (BTC) down 8.4%. CoinGlass suffered a sophisticated proxy attack, causing temporary disruption of access to their website and services.
Crypto liquidation occurs when a flash crash happens. Source: The Kobeissi Letter
At first, people attributed the crash to President Trump’s announcement of a 100% tariff on Chinese goods. Analyst Phyrex explained that inflation fears and shifts in Federal Reserve policy led to rapid liquidations in BTC, ETH, WBETH, and BNSOL. Low liquidity and Binance’s temporary issues of frozen accounts worsened these issues. High-leverage looped loans and the widening USDE peg further amplified the cascade. This prompted Binance to compensate users affected by system issues.
However, many experts believe this was not a simple chain reaction of panic selling. Analyst YQ questioned whether the crash was a coordinated market attack. Kook Capital also observes that Binance is trying to beat Hyperliquid (HYPE) but is unsuccessful.
“It is my belief Binance carried this attack out themselves in an attempt to cause an industry-wide mass liquidation cascade,” Kook claimed.
According to YQ’s analysis, large transactions were executed before Oracle updates. It caused temporary mispricing and triggered cross-liquidations across assets. Some stablecoins lost their peg for a few minutes, creating profit opportunities for arbitrage bots and potential bad actors.
“Is it coincidence that out of thousands of trading pairs, only the ones with announced updates experienced such extreme depegs? The probability seems vanishingly small,” YQ observed.
YQ pointed to suspicious profit patterns regarding fund flows, including outsized short-selling returns and massive accumulation during price bottoms. These patterns also involved unprecedented price discrepancies across exchanges. “These aren’t normal trading profits—they’re heist-level returns,” YQ said.
Compared to previous market crashes, YQ assessed that if this were a coordinated attack, it would represent a new step in cryptocurrency market manipulation.
“Instead of hacking systems or stealing keys, attackers would have weaponized market structure itself.” YQ commented.
Still, some analysts argue that excessive leverage and thin liquidity were the main culprits. When geopolitical fears strike a market overloaded with perpetual futures, cascading liquidations can occur naturally. Yet, the timing and synchronization of liquidations across platforms keep the “coordinated attack” hypothesis alive.
Aftermath and Lessons for Digital Finance Infrastructure
Crypto Black Friday has shaken investor confidence in the resilience of major exchanges. While some platforms, including Binance, have pledged compensation and system audits, experts warn these are temporary fixes unless deeper issues — such as leverage mechanisms, oracle governance, and liquidity transparency — are addressed.
From a crypto infrastructure standpoint, this event is a wake-up call for the entire Web3 ecosystem. The industry is building a trillion-dollar market on systems that remain alarmingly fragile. To prevent future “Black Fridays,” the community must enhance on-chain oversight, tighten risk management protocols, and foster collaboration among exchanges, developers, and regulators.
