The cryptocurrency market experienced a severe crash on October 10–11, 2025, wiping out nearly $20 billion in value within 24 hours. According to Dr. Martin Hiesboeck, head of research at Uphold, and a report from Wu Blockchain, the collapse was not random but a targeted attack exploiting a vulnerability in Binance's Unified Account margin system.
The flaw involved collateral assets—USDe, wBETH, and BnSOL—whose liquidation prices were based solely on Binance's internal spot markets rather than external price feeds. During the selloff, these assets depegged violently: USDe plunged to approximately $0.65, wBETH to $0.20, and BnSOL to $0.13, triggering a cascade of forced liquidations that amplified the downturn. The event was described as "Luna 2.0" due to parallels with past collapses.
Binance acknowledged extreme price dislocations and committed to full compensation for affected users who held these assets as collateral between 21:36 and 22:16 UTC, with payouts calculated using pre-crash prices. The exchange estimated realized losses between $500 million and $1 billion, with spot trading volume for the affected tokens reaching $3.5–4 billion on Binance during the crash. Analysts noted the timing coincided with a window between Binance's October 6 oracle adjustment announcement and its October 14 implementation, providing an opportunity for exploitation.
While an external shock, such as President Trump's tariff threats against China, may have initiated the selloff, the margin system's design—allowing yield-bearing tokens as collateral with internal pricing—exacerbated the damage. Binance has since announced new risk control measures to prevent future incidents.
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