The Oct. 10\u201311 sell-off that erased an estimated ~$19\u201320 billion across crypto within 24 hours has ignited a fierce post-mortem over whether market structure\u2014or malice\u2014turned a macro shock into cascading liquidations.<\/p>\n
On X, Uphold\u2019s head of research Dr. Martin Hiesboeck alleged the crash<\/a> \u201cis suspected to be a targeted attack that exploited a flaw in Binance\u2019s Unified Account margin system,\u201d arguing that collateral posted in assets such as USDe, wBETH and BnSOL \u201chad liquidation prices based on Binance\u2019s own volatile spot market, not reliable external data,\u201d which allowed a cascade once those instruments depegged on Binance order books. He added that the episode \u201cwas timed to exploit a window between Binance\u2019s announcement of a fix and its implementation,\u201d calling it \u201cLuna 2.\u201d<\/p>\n The crypto market crash on October 11 is suspected to be a targeted attack that exploited a flaw in Binance\u2019s Unified Account margin system.<\/p>\n The issue stemmed from using assets like USDE, wBETH, and BnSOL as collateral, whose liquidation prices were based on Binance\u2019s own\u2026<\/p>\n \u2014 Dr Martin Hiesboeck (@MHiesboeck) October 12, 2025<\/a><\/p>\n Binance has publicly acknowledged extraordinary price dislocations in exactly those instruments during the crash window and has committed to compensating affected users. In a series of notices published Oct. 12\u201313 (UTC), the exchange said that \u201call Futures, Margin, and Loan users who held USDE, BNSOL, and WBETH as collateral and were impacted by the depeg between 2025-10-10 21:36 and 22:16 (UTC) will be compensated, together with any liquidation fees incurred,\u201d with the payout \u201ccalculated as the difference between the market price at 2025-10-11 00:00 (UTC) and their respective liquidation price.\u201d Binance also outlined \u201crisk control enhancements\u201d after the incident.<\/p>\n The depegs were violent on Binance\u2019s books: USDe printed as low as roughly $0.65, while wrapped staking tokens wBETH and BNSOL also plunged, briefly gutting the collateral value in Unified Accounts and triggering forced unwinds. Third-party market coverage and exchange community posts documented those prints and the immediate knock-on to margin balances during the 21:36\u201322:16 UTC window.<\/p>\n Hiesboeck later framed the chain of events as leverage meeting brittle collateral mechanics rather than pure price discovery. In a follow-up explainer, he wrote: \u201cThe Trigger: It all started with external shock. A political post (Trump\u2019s new tariff threat<\/a>) hit the US stock market, and that fear spilled directly into crypto\u2026 The Amplifier: \u2026too many people using massive leverage\u2026 Domino Effect: \u2026panic selling hit related assets that were supposed to be stable (like USDe and wBETH), causing them to \u2018depeg\u2019\u2026 The Lesson (and Binance\u2019s Role): Analysts say the true issue was not an attack, but bad design\u2026 [the] system dumped [collateral] immediately at any price.\u201d He added that \u201cBinance is now preparing a huge compensation plan.\u201d<\/p>\n Macro shock is, in fact, a credible first domino. The Oct. 10\u201311 liquidation wave was triggered by new tariff threats from the US President Donald Trump against China, which sparked cross-asset risk-off and an aggressive deleveraging across crypto perps. Friday\u2019s crash was the \u201clargest ever\u201d liquidation event with roughly $20 billion in liquidations in a single day, with more than $1.2 billion of trader capital erased on Hyperliquid alone.<\/p>\n Where the debate turns technical is on the \u201cexploit\u201d claim. One camp points to a design gap in how Binance\u2019s Unified Account treated certain collateral: rather than anchoring to robust external pricing, liquidation thresholds referenced internal spot pairs that became thin and disorderly precisely when they were most system-critical. That design, critics argue, created a reflexive loop in which depegging collateral forced liquidations that sold more of the same collateral back into the same unstable books.<\/p>\n