Crypto Exchanges Trade Blame Over $20 Billion Market Liquidation

Core Insights - Global markets experienced a significant downturn following the announcement of a 100% tariff on Chinese imports by US President Donald Trump, leading to panic in equities and digital assets [1] - Nearly $20 billion was wiped out from crypto traders' positions due to forced liquidations triggered by the market turmoil [1] Group 1: Market Reactions - Major centralized exchanges faced turbulence, with reports of frozen dashboards, failed stop-loss triggers, and flash crashes that temporarily drove several tokens to near-zero values [2] - The disruptions led to frustration among traders, raising questions about potential system malfunctions or market manipulation within crypto exchanges [2] Group 2: Calls for Accountability - Crypto.com CEO Kris Marszalek urged for an independent review of exchanges that saw the most significant liquidations during the crash, emphasizing the need for regulatory action to protect user funds [3] - OKX CEO Star Xu indirectly criticized Binance, suggesting that its practices of inflating token prices and exploiting user sentiment contributed to the erosion of trust in the market [4] Group 3: Historical Context - Xu's comments referenced past controversies, particularly the collapse of FTX in 2022, which had accused Binance of exacerbating its downfall through public statements and a hasty withdrawal of support [5] - He noted that while Binance may have eliminated a competitor, the resulting systemic collapse harmed the entire industry, indicating that there were no true winners in the aftermath [6] Group 4: Technical Vulnerabilities - Allegations surfaced from crypto influencers, such as Wu Blockchain, suggesting that the market crash could be linked to vulnerabilities in Binance's Unified Account system, which allows users to use various assets as collateral for leveraged trades [7] - The loss of asset pegs in this system can lead to increased margin requirements, triggering a chain reaction of automated liquidations [7]