- Binance blamed a macro selloff and record leverage for the crash as derivatives open interest topped $100B.
- Liquidity vanished as market makers pulled back, amplifying price swings amid weak arbitrage and network congestion.
- Binance said systems stayed operational, depegs came later, and affected users were compensated after brief incidents.
Binance said the October 10, 2025, crypto flash crash stemmed from a macro shock, heavy leverage, and collapsing liquidity. The exchange addressed claims of a platform failure and outlined events between 20:50 and 22:15 UTC. According to Binance, liquidations spread across exchanges as derivatives exposure peaked and market infrastructure came under strain.
Macro Shock and Leverage Led to Crash
According to Binance, global markets sold off sharply following trade-war headlines on October 10, 2025. Crypto markets entered the session with elevated leverage after months of gains. Notably, Binance said derivatives open interest across markets exceeded $100 billion, leaving prices highly sensitive to shocks.
As selling accelerated, forced liquidations increased across venues. Binance said most Bitcoin holders sat on profits, which encouraged rapid profit-taking. At the same time, U.S. equity markets lost roughly $1.5 trillion, with major indexes posting their steepest drops in six months.
Liquidity Withdrawal and Network Congestion
However, Binance said extreme price moves triggered market makers’ automated risk controls. Those systems reduced exposure and pulled liquidity from order books. According to Kaiko data cited by Binance, Bitcoin liquidity fell near zero on several exchanges, except Binance, Crypto.com, and Kraken.
Consequently, even small sell orders caused sharp price swings. Cross-exchange arbitrage weakened as risk controls limited capital deployment. Meanwhile, Ethereum network congestion pushed gas fees above 100 gwei, Binance said. Delayed confirmations slowed transfers and widened price gaps during peak volatility.
Platform Strain and Token Depegs
Binance said brief depegs in USDe, WBETH, and BNSOL occurred after most liquidations finished. The exchange placed roughly 75% of liquidations before 21:36 UTC, while the depegs appeared later.
Binance attributed those moves to thin liquidity and index weighting issues. During the sell-off, Binance reported two platform-specific incidents. First, an internal asset transfer slowdown affected some users between 21:18 and 21:51 UTC.
Second, index deviations impacted three tokens between 21:36 and 22:15 UTC. Binance said its core matching, risk and clearing systems remained operational throughout and compensated affected users.
