Key Insights:
- Binance co-founder and CEO confirmed potential repayment to users who suffered losses.
- This loss is conditional and will exclude unrealized loss accrual.
- Expectations for a market rebound are high, but Bitcoin remains in a bearish consolidation zone.
After more than $19 billion was lost by the market in a historic liquidation event on October 10, the industry is gradually picking up the crumbs.
Binance Exchange, the largest digital currency trading platform, experienced several technical anomalies that affected traders. In a recent market update, the exchange’s executives have revealed how to navigate these anomalies.
Binance Exchange and the Asset Depegging
Binance Exchange commands the biggest spot liquidity in the crypto market. The trading platform also registers a significant share of the perpetuals market.
This dominance translates to significantly larger exposure for both the platform and its millions of users worldwide.
Amid the unexpected price crash, the trading platform experienced the depegging of top assets, including USDE, BNSOL, and WBETH.
The exchange stated that these depegging events impacted the positions of its traders. As its first move, it confirmed an investigation into the events for transparency and due diligence.
“In parallel, we are enhancing our risk management controls to mitigate the risk of similar incidents occurring in the future,” the exchange said, adding that it understands “the significance of this matter and sincerely appreciates your continued patience and understanding as we work diligently to address it.”
Beyond these depegging events, Binance, like other top trading outfits, confirmed no outages were recorded despite the traffic.
For many in the industry, this was considered a major sign that the market had matured.
Binance Co-Founder and CEO Breaks Silence
To address the depegging situation for the altcoins as mentioned earlier, co-founder Yi He apologized for the issues users are facing.
As the head of customer service for the exchange, she asked anyone impacted to contact the customer service desk of the platform.
Per her post on X, the exchange plans to provide the appropriate compensation. This will include losses from market fluctuations, and she noted that unrealized profits are not eligible for compensation.
The Binance founder also noted that users who took on positions after the market dip will not be touched. According to the update, the goal is to take responsibility and continue serving the community.
A similar response was echoed by Binance CEO Changpeng Zhao, also known as Richard Teng. Known for his relatively more vocal stance in the community, Teng said the exchange does not ‘make excuses.’
He said the platform listens closely, learned from what happened, and is committed to doing better.
He concluded his post by appealing to the community about the inherent market volatility.
Moving Forward From Market Downturn
The market selloff is one of the most significant in the market’s history. Crypto analyst Lark Davies highlighted some of the bearish events in the past, along with the accompanying liquidations.
First, he noted that the COVID-19 pandemic resulted in $1.2 billion in liquidations. This was topped only by the FTX Derivatives Exchange, which saw $1.6 billion in liquidations.
The unprecedented selloff recorded over the past 48 hours marked an unusually low discount for investors seeking new entry positions.
Market experts have already spotlighted the expectations from this latest crash. According to Raoul Pal, the current selloff is just noise.
Per his belief, liquidity will continue to flow into the digital currency ecosystem. Provided the mainstream TradFi world will continue to trail behind in digital utility, he considers crypto a worthy alternative for the long term.
The market has a history of withstanding the most intense selloffs. However, for now, some of the top digital currencies like Bitcoin, Ethereum, and XRP are down 6.55%, 6.73% and 9.72% in the past 24 hours.
Godfrey Benjamin is an experienced crypto journalist whose main goal is to educate everyone around him about the prospects of Web 3.0. His love for crypto was birthed when, as a former banker, he discovered the obvious advantages of decentralized money over traditional payments. With his vast experience covering various aspects of Web3, Godfrey’s articles has been featured on Cryptonews and Coingape, among others.
