On October 10, the cryptocurrency market experienced a dramatic sell-off, marking its steepest decline since the FTX collapse. In just a few hours, the total market capitalization fell by roughly $850 billion.
Bitcoin (BTC) dropped between 10–15%, falling from around $124,000 to near $105,000. But altcoins, particularly those traded on Binance, suffered even harsher losses—some seeing price drops of nearly 100% in a matter of minutes.
Tokens affected included Cosmos (ATOM) at $3.47, IoTeX (IOTX) at $0.01, and Enjin (ENJ) at $0.05, all of which briefly registered as zero on Binance. By contrast, on other exchanges, ATOM fell 53%, IOTX 46%, and ENJ 64.5%, with none hitting zero outside of Binance.
What Caused These Extreme Drops?
The crash on October 9–10 led to around $20 billion in liquidated crypto positions—roughly twenty times the liquidation seen during the COVID-19 market crash in 2020. Over 1.6 million traders lost their leveraged positions.
A significant factor was the use of borrowed funds by traders on Binance to amplify potential profits. Arthur Hayes, co-founder of BitMEX, explained that major exchanges, including Binance, were “liquidating collateral linked to cross-margin positions,” which intensified the market sell-off.
Essentially, as prices started to fall, Binance automatically sold altcoins used as collateral to cover losses. This created a cascade of selling pressure, driving prices even lower.
During this period, Binance’s systems became overloaded. Users reported frozen accounts, failed stop-loss orders, and delays in trade execution. Analysts also noted that market makers, such as Wintermute, withdrew funds amid these disruptions.
With limited buy orders in the system, certain coins temporarily displayed a price of “zero,” even though they retained value elsewhere. This phenomenon mirrors the “flash crash” of 2017, when Ethereum briefly plummeted to $0.10 on GDAX following a surge of automated sell orders.
Binance Responds
Yi He, Binance’s Chief Customer Service Officer, issued a public apology, acknowledging that “some users experienced issues with their transactions” during the intense volatility and high traffic.
CEO Richard Teng also expressed regret:
“I’m truly sorry to everyone affected. We don’t make excuses — we listen carefully, learn from what happened, and are committed to improving.”
Binance confirmed that it will compensate users for verifiable losses caused by platform or system failures, but losses stemming from normal price fluctuations or unrealized gains are not eligible for reimbursement.
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