Binance said roughly $150 billion in systemic liquidations occurred across global markets during the October 10 flash crash, driven by a macro shock colliding with heavy leverage and evaporating liquidity. The exchange rejected the idea that a core trading-system breakdown caused the broader market move and noted specific platform slowdowns that did not trigger the initial selloff. In response to the disruption, Binance said it compensated users with more than $328 million and launched support measures for affected participants. Blockchain congestion also worsened the situation: Ethereum gas fees spiked above 100 gwei at times, slowing transfers and widening price gaps.
Binance's $150B Liquidation Event
The crash unfolded after prolonged rallies left many traders heavily positioned, with open interest across bitcoin futures and options exceeding $100 billion before prices reversed. As prices fell, forced deleveraging fed on itself: market makers activated automated risk controls, reduced exposure and pulled liquidity from order books, which left bid-side depth nearly vanished on several major venues. With fewer resting orders, even relatively small liquidations pushed prices sharply lower and amplified the cascade of sell orders.
Macro Risks as Primary Cause
Binance pointed to external market pressure—including trade-war headlines—compounding with high leverage to make markets exceptionally fragile, and said about 75% of the day's liquidations occurred before certain platform index deviations. The exchange explicitly ruled out exchange failure as the root cause, while acknowledging platform incidents that affected some users. For more on Binance's public defence of its role, see Binance denies blame, which covers the company's statements on responsibility.
Technical Impact and Response
Binance acknowledged two platform-specific incidents during the crash that it said did not drive the initial market move. First, an internal asset-transfer system slowed between 21:18 and 21:51 UTC, temporarily affecting transfers between spot, earn and futures accounts and causing some users to see zero balances due to backend timeouts; Binance said the issue stemmed from a database performance regression and has been fixed. Second, temporary index deviations for USDe, WBETH and BNSOL occurred between 21:36 and 22:15 UTC; Binance attributed those deviations to thin liquidity and delayed cross-venue rebalancing and implemented methodology changes afterward.
Cross-Market Effects
The disruption was not confined to crypto: U.S. equity markets lost an estimated $1.5 trillion that day, with the S&P 500 and Nasdaq posting their largest one-day drops in six months, underscoring how the move coincided with stress across asset classes. Blockchain congestion and elevated gas pushed up transaction costs and slowed transfers, which limited capital mobility, hampered arbitrage and widened price fragmentation between venues. For historical context on prior market stress, see the October 2025 crash coverage linking past shocks to market liquidity strains.
Why this matters (short, practical)
If you run one to a thousand mining devices in Russia, this episode mainly underlines two operational risks: sudden market moves can sharply cut the fiat or crypto value of mined coins, and exchange-side slowdowns or blockchain congestion can delay moving funds off an exchange. High Ethereum gas fees make ETH transfers and on-chain swaps more expensive and slower, which can interrupt quick rebalancing or withdrawals after a volatile move. Binance's compensation program covered affected users, but compensation and support do not prevent short-term transfer delays or elevated fees during the event itself.
What to do?
- Check exchange balances regularly and keep transaction receipts; if an exchange shows zero balances, wait for official updates before panic actions.
- Keep a portion of holdings in self-custody to ensure access during exchange slowdowns and avoid concentrating all funds on one platform.
- Monitor Ethereum gas fees before making transfers; postpone non-urgent ETH moves when gas spikes above typical levels.
- Stagger large transfers and sell orders to reduce the chance of being caught in forced deleveraging during fast moves.
- Follow official exchange communications for compensation processes and methodology changes rather than relying on social media rumours.
