BlockBeats news, January 31st, according to an official announcement, on October 11, 2025, the cryptocurrency market experienced severe volatility and a “flash crash.” Binance issued a statement explaining that the market turmoil was primarily triggered by multiple factors, including macroeconomic shocks, concentrated liquidation of high-leverage positions, liquidity contraction due to market maker risk controls, and Ethereum network congestion, rather than being caused by platform systemic failures.
Binance stated that during the extreme market conditions, core matching engines, risk verification, and liquidation systems continued to operate normally without any overall downtime or interruptions. The chain of market liquidations mainly occurred in the initial phase of the macroeconomic shock, with high-leverage positions being collectively deleveraged amid rapidly shrinking liquidity.
From a macroeconomic perspective, global financial markets generally declined that day, with the U.S. stock market losing approximately $1.5 trillion in value. The cryptocurrency market had been rising for several consecutive months prior, with open interest in derivatives at historical highs, making it particularly sensitive to shocks. Meanwhile, extreme volatility triggered market maker algorithm risk controls, leading to a significant drop in order book liquidity within a short period and amplifying price fluctuations.
Binance further disclosed the investigation results of two platform-related technical incidents:
Asset transfer subsystem performance degradation (05:18–05:51, UTC+8): Under high concurrent pressure, some users experienced slower fund transfers, with a very small number of accounts briefly displaying a “balance of 0” issue, but no asset losses were involved.
USDe, WBETH, BNSOL index brief deviation (05:36–06:15, UTC+8): Against the backdrop of insufficient liquidity and on-chain congestion, index weighting and outlier filtering mechanisms were amplified, resulting in short-term deviations.
Binance stated that the above issues occurred after the most severe market volatility, and approximately 75% of the liquidations that day happened before the token deviations, so they were not the main cause of the flash crash. In response to the incident, the platform has completed system optimizations and compensated eligible affected users.
As of October 22, 2025, Binance has completed full compensation, with a cumulative amount exceeding $328 million. Additionally, Binance launched the “Mutual Aid Plan” on October 14th, establishing a $300 million user assistance fund and separately providing $100 million in low-interest loans to support ecosystem and institutional clients in maintaining stable operations.
