Key Takeaways

• Binance clarified that several altcoins, including IoTeX and Cosmos, appeared to crash to $0 on its platform due to a “display issue” caused by a recent reduction in the number of decimal places for minimum price movement, not an actual price collapse.

• The token anomaly occurred amid Friday’s historic market crash, which saw over $20 billion in leveraged positions liquidated across the crypto market, making it the worst single-day event in history.

• The event was linked to the USDe synthetic dollar losing its peg on Binance, which some traders theorize was a coordinated attack exploiting the exchange’s “Unified Account” feature’s reliance on internal order book data.

The Binance Price Glitch Amidst Market Turmoil

Crypto exchange Binance released an official statement to address user concerns following a market meltdown where the prices of several altcoins, including Cosmos and Enjin, appeared to plummet to near $0 on the platform. The exchange asserted that the tokens did not, in fact, crash to zero, but rather displayed a false price due to a “display issue.”

Binance explained that the technical error stemmed from a recent update where certain trading pairs, such as IOTX/USDT, had the number of allowed decimal places for minimum price movement reduced.

This adjustment led the user interface to show a zero price when the tokens’ values were too small to be accurately rendered with the new decimal limits.

This technical glitch occurred on a Friday marked by historic market volatility, which resulted in the largest 24-hour crypto liquidation in market history, wiping out a total of nearly $20 billion in leveraged positions across all exchanges.

The USDe Depeg and Attack Hypotheses

Compounding the chaos was an incident involving Ethena’s synthetic dollar, USDe, which briefly lost its dollar peg on Binance, dropping sharply to $0.65. While the asset maintained its peg on most other exchanges, this localized failure on Binance triggered significant forced liquidations for platform users who had used the asset as collateral.

Some market observers, including crypto trader ElonTrades, speculated that the USDe depegging event may have been a coordinated exploit rather than a simple glitch.

This theory suggests that attackers intentionally exploited Binance’s “Unified Account” feature, which, at the time, used price oracle data sourced from the exchange’s internal order books instead of more resilient external oracles.

Knowing that Binance had announced plans to transition to external price feeds by October 14th, the attackers may have used this narrow window to dump large amounts of USDe, manipulate the price on Binance’s thin internal book, and initiate a massive, cascading liquidation event. This speculated exploit allegedly caused up to $1 billion in liquidations on the platform alone.

Compensation and Calls for Regulatory Review

After the technical mess and depegging event, Binance was quick to start paying back users, ultimately handing out $283 million. The money went to people who were liquidated as a direct result of platform glitches or the depegging itself.

But even as Binance acted fast, the sheer size of the market collapse and the platform’s own specific issues pushed many to demand a closer look. That included rival CEO Kris Marszalek of Crypto.com, who publicly urged regulators to investigate all exchanges that took heavy losses, specifically questioning their fairness, pricing, and anti-manipulation measures during the downturn.

Final Thoughts

While Binance made things right with its users, the whole mess drives home the point that we need stronger, outside pricing oracles. It also puts more pressure on regulators from rivals and the community to keep a closer eye on how centralized exchanges do business.

Frequently Asked Questions

Why did the tokens show a price of 0?
Binance claimed it was a “display issue” caused by a recent reduction in the number of decimal places for minimum price movement on certain trading pairs.

What was the USDe depeg cause?
It was confined to Binance, with speculation pointing to an exploit of the “Unified Account” feature’s reliance on internal order book price data instead of external oracles.

Did Binance compensate users?
Yes, Binance announced a total of $283 million in compensation for users who were liquidated due to the depeg event and verified platform errors, but not for losses from general market fluctuations.