Binance has revealed it will compensate users a total of $283 million following incidents of collateral asset depegging during the market crash on October 10.
The exchange attributed this to a combination of thin liquidity, dormant limit orders from as far back as 2019, and user interface display errors.
Sponsored
Sponsored
Binance Compensates $283 Million to Affected Users: Essential Information
In a statement released late Sunday, Binance indicated that the incident was due to “macro-driven volatility” rather than a failing platform.
They acknowledged that global macroeconomic pressures prompted significant sell-offs by both institutional and retail traders, leading to steep price drops across cryptocurrency markets.
Despite speculation that Binance’s systems might have experienced issues, the exchange confirmed that its futures and spot matching engines, along with API trading, were fully operational throughout the incident.
“The forced liquidation volume on Binance accounted for a relatively minor percentage of total trading activity,” the announcement states.
Binance also confirmed that certain assets, including USDe, BNSOL, and WBETH, briefly depegged as a result of the market jolt, which liquidated some users’ positions using these tokens as collateral.
The platform acted swiftly to compensate the affected users within 24 hours, issuing two batches of payments totaling around $283 million.
“In cases where the de-pegging affected users who faced liquidation due to holding these assets as collateral, Binance has taken responsibility and fully covered their losses. Compensation has been distributed in two batches, totaling approximately $283 million,” the exchange stated.
Sponsored
Sponsored
What Truly Transpired? Legacy Orders and “Zero Price” Glitches
In a comprehensive post-mortem, Binance noted that part of the confusion arose from legacy limit orders still active on selected spot pairs, some of which had been in place since 2019.
During the sell-off, low liquidity conditions led to these old limit orders being executed at extreme prices on pairs like IOTX/USDT and ATOM/USDT, creating a temporary illusion of flash crashes.
Further complicating the situation, user interface display errors occurred after Binance adjusted tick size settings, which indicate the smallest allowable price movements on certain trading pairs. This resulted in prices appearing as zero on the interface, although actual executions and API data remained accurate.
Binance stated it has now rectified these display issues and will keep optimizing its systems to avoid similar confusion in the future.
The company reaffirmed its user-first principle, ensuring ongoing transparency and updates for those still submitting compensation claims.
It also clarified that the depegging of Earn products was not the cause of the crash, as it followed the broader market downturn.
“We continue to commit to addressing these issues in a responsible and transparent manner,” Binance assured.
This incident represents one of Binance’s most significant compensation efforts recently. It underscores the critical balance exchanges must maintain between managing liquidity and ensuring system resilience in an ever-active market, even when traditional finance is at rest.
