In brief
- Binance said its systems remained operational during the $19 billion market-wide liquidation, attributing reports of tokens hitting zero to a display error.
- Affected assets that depegged on the exchange included USDe, BNSOL and wBETH.
- Analysts described the payout as rare and likely aimed at restoring confidence in the post-CZ era.
Crypto exchange Binance said Sunday afternoon it had reimbursed users affected by the October 10 depegging of several Earn assets, later clarifying that the sharp price drops seen during Friday’s market crash were caused by a display error rather than actual token failures.
Binance claimed hours after it acknowledged compensation that its core trading systems remained operational throughout and that the volatility was instead driven by “overall market conditions” rather than a fault in its platform.
“The forced liquidation volume processed by Binance platform accounted for a relatively low proportion to the total trading volume,” the statement reads.
Binance stated that the compensation, totaling around $283 million, was completed within 24 hours and covered users whose positions were liquidated while holding the affected assets as collateral across Margin, Futures, and Loan products.
Binance added that it would continue reviewing user cases and report any suspicious trading activity to regulators if detected.
Approached for comment, a Binance spokesperson told Decrypt the firm would review internally for any updates, noting that time constraints could delay a full response.
Crypto’s “Black Friday”
The so-called Black Friday crash that occurred sometime between 8:50 p.m. and 10:00 p.m. UTC on October 10 caused sharp sell-offs across the crypto market.
Affected assets that depegged on Binance included USDe, a synthetic dollar issued by Ethena, BNSOL, a Solana liquid staking derivative listed by Binance, and wBETH, Binance’s wrapped version of staked Ether.
Analysts marked the roughly quarter-billion payout as unusual for its size and timing, suggesting it reflected reputational risk as much as goodwill.
“It’s obviously not common. Binance has experienced several issues in quick succession recently, and the incident on Black Friday is just one example,” Ryan Yoon, senior analyst at Tiger Research, told Decrypt.
Yoon noted that the depegging of wrapped tokens on Binance could suggest “platform-specific liquidity fragmentation,” adding that the payouts appear to be “more akin to reputation risk management in the post-CZ era than goodwill.” Decrypt reached out to Binance separately on this claim and will update this article should the firm respond.
While the $283 million payout “may seem substantial, it’s relatively small compared to Binance’s overall earnings,” Min Jung, senior analyst at quantitative trading firm Presto, told Decrypt.
“The move likely reflects a mix of goodwill and strategic optics,” aimed at “reinforcing user trust and strengthening its brand image at a time when the CEX vs. DEX narrative is gaining momentum,” Jung said.
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