Crypto’s Chaos Day: Macro Mayhem, Not a Binance Blunder

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Markets

What to know:

  • Binance blamed the Oct. 10 chaos on a macro-driven squall tangled with heavy leverage and thinned liquidity, scoffing at any notion of a clunky core trading machine. No goblins in the gears, thank you very much.
  • The exchange said more than $100 billion in bitcoin derivatives open interest and a thinning forest of order books fanned cascading liquidations, while blockchain congestion and Ethereum gas fees played tag with prices across venues.
  • Binance admitted two platform hiccups, paid out over $328 million to the affected, and noted roughly 75 percent of liquidations happened before the index deviations, suggesting the big market wobble was the real star of the show.

Binance blamed the October 10 flash crash on a macro shock colliding with heavy leverage and evaporating liquidity, rather than any breakdown in its trading systems following speculative chatter on social media.

In a report released Saturday, the exchange said global markets were already under pressure following trade-war headlines when crypto markets cracked. Bitcoin and ether had marched upward for months into early October, leaving traders perched on tiptoes and exposed like tightrope walkers with wobbling ankles.

10/10’s myths and facts explained.

👉

– Binance (@binance) January 30, 2026

At the time, open interest across bitcoin futures and options exceeded $100 billion, creating a pantry full of temptations for forced deleveraging once prices started to slide, it said.

The selloff quickly fed on itself. As prices slipped, market makers flicked on automated risk controls and drew back exposure, pulling liquidity from order books. Data cited by Binance, sourced from Kaiko, showed bid-side depth nearly vanished on several major exchanges during the peak. With fewer resting orders, even tiny liquidations sent prices tumbling like a gobstopper rolling downhill.

The disruption wandered beyond 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. Binance said roughly $150 billion in systemic liquidations occurred across global markets.

Blockchain congestion added to the strain. Ethereum gas fees spiked above 100 gwei at times, slowing transfers and slowing arbitrage between venues. With capital not moving quickly enough, price gaps widened and liquidity fragmented further.

Binance incidents that occured

Binance acknowledged two platform-specific incidents during the crash but said neither caused the broader market move.

The first involved a slowdown in its internal asset-transfer system between 21:18 and 21:51 UTC, affecting transfers between spot, earn and futures accounts. Core trading systems remained operational, but some users temporarily saw zero balances displayed due to backend timeouts.

Binance said the issue stemmed from a database performance regression under surge traffic and has since been fixed. Affected users were compensated.

The second incident involved temporary index deviations for USDe, WBETH and BNSOL between 21:36 and 22:15 UTC, after most liquidations had already occurred. Binance said thin liquidity and delayed cross-venue rebalancing caused local price moves to disproportionately affect index calculations.

Methodology changes have since been implemented, and impacted users were compensated.

Binance said about 75% of the day’s liquidations occurred before the index deviations, pointing to the initial macro shock as the primary driver.

In total, the exchange said it compensated users with more than $328 million and launched additional support programs to stabilize participants affected by the crash.

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2026-01-31 12:48