Months After $19 Billion Crash, Binance Remains in the Spotlight as Bitcoin Struggles
Months after the Oct. 10 liquidation cascade, crypto markets have yet to recover fully, and traders remain divided over Binance’s role as Bitcoin continues to slide.
At first glance, the $19 billion wipeout on Oct. 10 appeared routine: a rapid chain of forced liquidations across major exchanges as BTC tumbled to around $79,254.20. But the lack of transparency and the scale of the sell-off—now the largest single-day liquidation in crypto history—has frustrated traders and fundamentally changed how they view market risks.
Binance, the world’s largest crypto exchange, has become the focal point for scrutiny. Bitcoin dropped as much as 12.5% that day—the steepest decline in 14 months—forcing exchanges to close leveraged positions that had run out of funds. Social media chatter frequently singles out Binance, whether due to its scale, dominance in derivatives, or the opaque circumstances of the crash.
Binance has consistently denied responsibility. The company told CoinDesk that the event was not caused by internal issues, citing market factors such as macroeconomic pressure, high leverage, illiquid conditions, and Ethereum network congestion. During a recent AMA, co-founder Changpeng “CZ” Zhao called claims that Binance caused the crash “far-fetched,” noting that the exchange paid roughly $283 million in compensation to affected users.
Yet critics remain unconvinced. The $19 billion figure has become symbolic, and many see Binance’s payout as insufficient relative to the scale of losses. Pseudonymous trader Bitcoin Realist wrote on X: “You…liquidated $19 billion on 10/10 alone… This is like spitting in our faces.”
Even high-profile voices have weighed in. Ark Invest CEO Cathie Wood blamed a “Binance software glitch” for roughly $28 billion in deleveraging, while Binance co-founder He Yi clarified that the exchange does not serve U.S. individuals. Competitors have also seized the moment: rival exchange OXK’s founder Star Xu criticized the broader damage of Oct. 10, and decentralized exchange Hyperliquid highlighted gains in derivatives and liquidity as Binance faces reputational pressure.
Not everyone agrees Binance should shoulder blame. Wintermute CEO Evgeny Gaevoy described the event as a classic flash crash: “It was a mega-leveraged market on an illiquid Friday night, driven by macro news. Finding a scapegoat is comfy, but blaming one exchange is intellectually dishonest.” In other words, crypto’s structural leverage and conditional liquidity amplified the crash, and Binance was just the largest visible venue.
The transparency gap only fuels speculation. Former CFTC regulator Salman Banaei suggested the event warrants investigation, comparing it to the 2010 stock market flash crash. He stressed that oversight deters manipulation, even if none occurred. Traders like Flood have fueled conspiracy theories, claiming ongoing sell pressure from major exchanges since 10/10.
The deeper issue, many argue, is market structure. Liquidity remains thin, leverage-heavy, and confidence-dependent. In bull markets, thick order books and abundant liquidity cushion shocks; in bear markets, sparse liquidity and retreating market makers amplify volatility. Mike Silagadze, CEO of Ether.fi, noted the market feels “worse than post-FTX,” with fundamentals stronger but price action showing almost no bids.
Eric Crown, former options trader, summed it up: “I don’t know if Binance deliberately ruined the market in October. More likely, high leverage, low liquidity, and risky altcoins created a perfect storm—and that’s exactly what happened.”
