Incident Overview
On October 10 2025 between 21:36 UTC and 22:16 UTC, three Binance Earn assets—Ethena’s USDe, Binance’s BNSOL and Wrapped Beacon ETH (WBETH)—experienced severe depegging from their intended values. USDe briefly traded as low as $0.65 while BNSOL and WBETH also plunged. The depegging triggered forced liquidations in Binance’s Unified Account system due to outdated limit orders and UI display issues. Binance publicly acknowledged the event via official announcements on October 12 and began compensating all affected futures, margin and loan users within 24 hours.
Compensation Details
- Total payout: $283 million.
- Eligible users: Those holding USDe, BNSOL or WBETH as collateral during the depeg window.
- Calculation: Difference between the market price at 2025-10-11 00:00 UTC and the liquidation price for each position.
- Coverage: Liquidation fees and verified collateral losses from internal transfers and Earn redemptions.
Root Causes
Analysis identified three primary factors contributing to the depeg crisis: thin liquidity on Binance order books, triggering of dormant limit orders dating back to 2019, and a display issue caused by a recent change in decimal parameter settings that showed zero prices for certain pairs. Combined with a broader market sell-off triggered by external macro shocks, these factors created a reflexive loop wherein depegged collateral forced liquidations, further amplifying price dislocations.
Market Impact
The incident led to an estimated $20 billion in liquidations across crypto within 24 hours, marking one of the largest single-day margin unwind events in history. Bitcoin fell from $122 000 to $102 000 within the same window. While assets on deeper liquidity venues remained stable, the opacity of internal pricing on Binance sparked widespread concern among traders and regulators about centralized exchange risk management.
Binance Response and Mitigations
Binance’s leadership issued apologies and detailed a roadmap for enhancing risk controls. Key measures include:
- Revising pricing logic for algorithmic and liquid staking tokens to anchor to robust external feeds.
- Implementing price floors and updated index rules to prevent extreme on-platform dislocations.
- Auditing and retiring dormant limit orders that pose resurfacing risk during low liquidity.
The exchange also established an independent review panel to assess platform resilience and strengthen governance protocols to safeguard users against future systemic shocks.
Industry Response
Market participants and industry observers have broadly welcomed the swift compensation, noting it as a historic demonstration of exchange accountability. However, some analysts caution that the event underlines critical vulnerability in reliance on centralized order books for collateral valuation. Calls for standardized cross-exchange oracle models and improved transparency in liquidation reporting have gained traction.
Outlook
Binance’s proactive measures may restore user trust and set a new precedent for handling platform failures. Meanwhile, broader market sentiment hinges on regulatory scrutiny and the effectiveness of the newly announced controls. The industry awaits further clarifications from regulatory bodies on potential guidelines for resilient exchange architectures.
.
Comments (0)