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Binance Compensation Payout Reaches $283 Million After Glitch - CoinsText
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Binance Compensation Payout Reaches $283 Million After Glitch

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Binance Compensation Payout Reaches $283 Million After Glitch

Binance, the world’s largest cryptocurrency exchange, has reimbursed customers a total of $283 million following a chaotic market event that briefly sent several tokens’ prices to zero. The payout comes after a display glitch and temporary depegging of certain tokens fueled panic across the crypto market during one of the largest single-day liquidations in recent history.

The incident unfolded amid a volatile Friday that erased around $20 billion in leveraged positions, impacting traders across futures, margin, and loan markets. Screenshots of tokens showing $0 flooded social media, causing widespread concern among retail and institutional participants. While the glitch caused visible panic, Binance confirmed that actual token values remained intact.

Display Glitch Sparks Market Panic

According to Binance, the display issue originated from updates to trading pairs such as IOTX/USDT, which reduced the number of decimal places allowed for minimum price movements. This minor change caused the platform to show a $0 price for certain tokens whose actual values were too small to render with the new decimal format.

“Certain trading pairs, such as IOTX/USDT, recently reduced the number of decimal places allowed for minimum price movement, causing displayed prices in the user interface to show zero,” Binance explained. “This was a display issue, not an actual $0 price.”

Despite the clarification, traders reported widespread panic, believing their holdings had vanished. The situation added to the chaos already triggered by a market downturn that affected multiple altcoins.

Tokens Temporarily Lose Pegs

Adding to the turbulence, three Binance Earn assets—Ethena’s USDe, Binance Solana liquid staking token (BNSOL), and Wrapped Beacon ETH (WBETH)—briefly lost their intended peg. Ethena’s USDe, designed to maintain a 1:1 peg with the U.S. dollar, dropped to $0.66 for a short period on Binance.

Binance confirmed that all affected users between 21:36 and 22:16 UTC on October 10 were fully reimbursed. This included traders using USDe, BNSOL, or WBETH as collateral, as well as customers who suffered losses through Earn redemptions or internal transfers.

Ethena Labs CEO Guy Young emphasized that the depeg was confined to Binance and did not reflect broader market conditions. “It is not accurate to describe this as a USDe depeg when a single venue was out of line with the deepest pools of liquidity,” Young clarified.

Speculation Over Possible Exploit

Amid the confusion, some market participants speculated that Binance had been targeted by a coordinated exploit. A trader known as ElonTrades suggested that attackers could have manipulated Binance’s Unified Account feature, which uses internal order-book data rather than external oracle feeds. This, according to the theory, could have triggered sudden price discrepancies and a cascade of liquidations.

Binance, however, denied any evidence of an external attack. The exchange clarified that the extreme market downturn occurred prior to the depegging events and emphasized that the situation stemmed from internal technical factors rather than malicious activity.

Binance Implements New Safety Measures

To prevent similar issues in the future, Binance announced updates to its reference index. These include the integration of asset redemption prices and the introduction of a soft price floor for USDe. The exchange said these measures are intended to stabilize trading activity during extreme volatility and minimize potential disruptions to users.

Binance also stated that it is reviewing ongoing user cases related to the display glitch and temporary token depegs, reaffirming its commitment to transparency and infrastructure resilience.

Renewed Calls for Exchange Oversight

The incident has reignited debates around the regulation and oversight of centralized cryptocurrency exchanges. Industry leaders, including Crypto.com CEO Kris Marszalek, urged regulators to investigate the causes of extreme price swings, citing risks to retail investors.

“Centralized exchanges must ensure protection against technical and structural failures,” Marszalek said. “Consistent regulatory standards are essential to maintain investor confidence in the ecosystem.”

Market Recovery

Despite the disruption, the cryptocurrency market staged a notable recovery over the weekend. Binance’s native token, BNB, rallied more than 11% in 24 hours, while The Block’s GM30 Index, which tracks the top 30 cryptocurrencies by market capitalization, rose by 6.8%.

The payout of $283 million demonstrates Binance’s ability to respond quickly to technical issues and reassure customers during periods of extreme market stress. It also reflects the exchange’s intent to reinforce trust and maintain liquidity amid volatile conditions.

Looking Ahead

Binance’s handling of the display glitch and temporary token depegs highlights the challenges faced by centralized exchanges in managing complex systems and volatile markets. Moving forward, transparency, technical safeguards, and user protections are likely to remain top priorities for exchanges seeking to maintain confidence among traders and investors.

While the market continues to recover, investors are reminded to remain vigilant, monitor updates from exchanges, and understand the technical and operational risks associated with centralized trading platforms.

The $283 million compensation reinforces that exchanges can respond effectively to crises, but the incident also underscores the importance of consistent oversight and risk management in the fast-evolving crypto landscape.


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