Binance, the crypto exchange, updated its users following the apparent crash of several tokens to $0 amid Friday’s market downturn. The exchange clarified that this $0 display was due to a “display issue,” not an actual loss of value.
During the market chaos, several altcoins, including IoTeX (IOTX), Cosmos (ATOM), and Enjin (ENJ), appeared to fall to $0 on Binance, while other centralized exchanges showed these tokens trading well above that threshold.
According to an announcement from Binance on Sunday, the tokens did not actually lose 100% of their value. Binance stated:
“Certain trading pairs, such as IOTX/USDT, recently reduced the number of decimal places permitted for minimum price movement, resulting in displayed prices of zero in the user interface—a display issue, not an actual $0 price.”
The Binance exchange faced controversy after the market crash that wiped out close to $20 billion in leveraged positions—the worst single-day liquidation in crypto history.
Related: Market crash ‘does not have long-term fundamental implications’ — Analyst
Traders suspect a coordinated attack on Binance
Traders believe Binance may have been subject to a malicious exploit, which caused Ethena’s USDe synthetic dollar to lose its dollar value on Binance, dropping to just $0.65, according to crypto trader ElonTrades, who speculated about the attributions of the incident.
The exploiters leveraged digital assets linked to Binance’s “Unified Account” feature that relies on oracle data from internal order books rather than external oracles, according to ElonTrades.
Binance had previously announced plans to resolve this issue by obtaining price feeds from external oracles by October 14, creating an opportunity for threat actors to exploit the mechanism and cause significant price discrepancies, postulated ElonTrades.
This incident led to a cascade of liquidations amounting to up to $1 billion on Binance, which eventually affected the broader market.
Binance has already announced a total compensation of $283 million for those who were liquidated due to the depegging event.
In light of this, Kris Marszalek, CEO of Crypto.Com, has called for regulatory investigations into centralized exchanges that experienced significant losses during the historic market decline on Friday.
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