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Binance offers compensation after $19bn crypto crash that crippled centralised exchanges, boosted DeFi
Yahoo Financeยท2025-10-11 17:38

Market Overview - The crypto market experienced significant turmoil following US President Donald Trump's threat to impose 100% tariffs on China and new export controls on software, leading to one of the largest selloffs in years [1] - The selloff resulted in a $19 billion wave of liquidations, marking it as the largest liquidation event in crypto history, with over 1.6 million traders liquidated in 24 hours and $7 billion lost in a single hour [2] Price Movements - Bitcoin, which had reached an all-time high of $125,000 earlier in the week, saw a 16% drop, briefly falling below $105,000 before recovering to $112,000 [3] - Altcoins faced severe losses, with declines ranging from 30% to 80% [3] Exchange Responses - Binance, a leading centralized exchange, acknowledged system disruptions due to the surge in trading volume and announced plans to review and compensate users for losses directly caused by its system failures [4][5] - Binance's co-founder stated that users who incurred losses attributable to the platform should contact customer service for compensation, but losses from market fluctuations would not be covered [5] DeFi Performance - In contrast to centralized exchanges, decentralized finance (DeFi) protocols managed to process record volumes without disruptions, with Uniswap achieving a daily trading volume of $10 billion [6] - Aave, a top lending protocol, handled over $180 million in collateral liquidations within an hour, which was described as the largest stress test of its $75 billion lending infrastructure, with fees rising to $15 million from a daily average of $3 million [7] - The co-founder of Euler, another lending protocol, noted that DeFi operated flawlessly during the stress test without any emergency circuit breakers or regulatory interventions, emphasizing the effectiveness of free markets and code [8]