TLDR
- Binance claims $0 token prices during Friday’s market crash were a UI display bug, not actual crashes
- The exchange says reduced decimal places in trading pairs caused zero prices to appear on screens
- Traders believe Binance may have been exploited through its Unified Account feature using internal price data
- Binance pledged $283 million in compensation for users liquidated during the Ethena USDe depegging
- Users reported frozen accounts and failed stop-loss orders during the $20 billion liquidation event
Binance released a statement Sunday addressing reports that several cryptocurrency tokens crashed to $0 on its platform during Friday’s market sell-off. The exchange maintains the zero prices were a user interface error, not actual market values.
Multiple tokens including IoTeX, Cosmos, and Enjin displayed $0 prices on Binance during the crash. These same cryptocurrencies maintained normal prices on competing exchanges throughout the event.
Binance explained that certain trading pairs reduced the number of decimal places for minimum price movement. This change caused the platform’s interface to show zero while actual order execution and account balances reflected real market prices.
The incident happened during the largest single-day crypto liquidation in history. An estimated $20 billion in leveraged positions were wiped out across global markets.
Exploit Theory Centers on Unified Account Feature
Crypto analyst ElonTrades proposed that Binance may have been targeted through a coordinated exploit. The theory focuses on the exchange’s Unified Account feature, which pulls price data from internal order books instead of external oracle sources.
Binance had announced it would switch to external oracle feeds by Tuesday. ElonTrades suggested bad actors exploited this transition window to manipulate prices.
The most severe impact hit Ethena’s USDe stablecoin, which lost its dollar peg on Binance and fell to $0.65. The token maintained its peg on other platforms during the same timeframe.
This depegging triggered an estimated $1 billion in liquidations on Binance. The cascade effect spread liquidations across other exchanges as the market reacted.
Technical Failures and User Complaints
Traders reported widespread technical issues during the market crash. Many users said their accounts froze and prevented them from executing trades.
Stop-loss orders failed to trigger for multiple users. Some traders reported being unable to close losing positions as prices fell.
Binance acknowledged system delays caused by heavy trading volume. The exchange stated that user funds remained secure throughout the incident.
Other major exchanges also experienced problems. Coinbase and Robinhood both reported technical issues during the same period.
Compensation and Investigation Calls
Binance committed $283 million in total compensation for users affected by the USDe depegging event. The exchange has not released details about distribution methods or eligibility.
Crypto.Com CEO Kris Marszalek called for regulatory investigations into exchanges that suffered major losses during the crash. His statement came as industry leaders discussed Friday’s events.
Users continue reporting issues with withdrawals and peer-to-peer transactions. Binance says its systems are operational but has not addressed ongoing user complaints.
The exchange has not announced any timeline for resolving remaining technical problems or providing additional compensation beyond the depegging victims.
