TLDR:
- $60–90M in USDe and related tokens dumped on Binance triggered internal price distortions.
- Binance’s use of order-book data instead of oracles led to $1B in forced liquidations.
- Coordinated shorts on Hyperliquid profited $192M as prices fell globally.
- The event exposed the risk of centralized pricing systems under leveraged conditions.
Crypto traders watched prices nosedive on October 11 in one of the year’s most chaotic crashes. Billions vanished in hours, and confusion spread fast.
Many blamed stablecoins, while others pointed at market panic. But new details show this was not a random collapse. It started with a single flaw in Binance’s collateral system, timed perfectly with global market tension.
How Binance’s Pricing Flaw Sparked the Crypto Crash
According to ElonTrades on X, the chain reaction began when roughly $60–90 million worth of USDe, wBETH, and BNSOL was dumped on Binance.
Those assets were allowed as collateral in the platform’s Unified Account feature, which valued them using its own market data instead of external oracles. That internal pricing created a blind spot large enough to exploit.
Attackers used the gap to crash USDe’s value on Binance to around $0.65, while it stayed stable elsewhere.
The drop instantly wiped margin values and forced between $500 million and $1 billion in liquidations. It was not a failure of USDe itself but the result of Binance’s valuation method.
Adding to the chaos, a U.S. tariff announcement from former President Trump hit headlines at the same time. Fear spread across already thin liquidity, worsening the selloff and pushing markets further down.
Coordinated Shorts and Global Liquidations
Fresh wallets linked to Arbitrum funding sources reportedly opened $1.1 billion in Bitcoin and Ethereum shorts on Hyperliquid hours before the crash.
Those traders gained about $192 million as prices collapsed. The timing and precision pointed to coordination between the Binance exploit and the external short positions.
As collateral values fell, forced sales dumped Bitcoin, Ethereum, and other major tokens into low liquidity. Automated trading systems on other exchanges followed the move, creating a chain reaction.
The total wipeout reached more than $19 billion in global liquidations, with some altcoins losing over half their value within hours.
Binance later admitted “platform-related issues” and said it would compensate affected users. The exchange also confirmed it had accelerated the move to oracle-based pricing to close the loophole.
Aftermath of the Crypto Crash and Takeaways
Ethena’s USDe remained stable across other exchanges, confirming the issue was local to Binance.
Redemptions and collateralization stayed intact, proving the protocol worked as designed. The event has since been described as a case study in how internal pricing systems can magnify small exploits into large market shocks.
From a $90 million dump to a $19 billion crash, the Oct 11 event revealed how fragile leverage and liquidity can be when pricing models fail.
The post What Really Caused the $19B Crypto Crash and How a Binance Flaw Set It Off appeared first on Blockonomi.
This articles is written by : Nermeen Nabil Khear Abdelmalak
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