Rumors of a potential U.S. Securities and Exchange Commission (SEC) investigation into Binance have reignited scrutiny over the catastrophic market event of October 10, 2025, which saw the largest single-day liquidation in cryptocurrency history. The speculation was amplified by a post from market expert Hugo Crypto on X, who cautioned that while the probe remains unconfirmed, the circumstances of the crash demand serious attention.
The October 10, 2025, event saw approximately $19 billion in leveraged positions liquidated, with a staggering $3.21 billion wiped out in just one minute. This forced around 1.6 million traders out of their positions as Bitcoin's price plummeted from about $122,000 to $104,000. In the immediate aftermath, Binance attributed the turmoil to a broader macroeconomic shock and denied direct responsibility, though it later paid about $283 million in compensation to affected users.
The narrative around the crash has evolved in recent months. In January 2026, Ark Invest CEO Cathie Wood stated on Fox Business that a "Binance software glitch" triggered the collapse. Later that month, OKX CEO Star Xu publicly accused Binance of "irresponsible marketing campaigns," escalating tensions between the major exchanges. In early February, Binance reportedly sent cease-and-desist letters to X users speculating about the exchange's solvency.
Former regulators have drawn parallels to traditional finance. Salman Banaei, a former official at the Commodity Futures Trading Commission (CFTC), compared the incident to the 2010 Flash Crash, arguing it merits a similarly rigorous investigation.
Amid this renewed pressure, Binance co-founder Changpeng "CZ" Zhao fired back on X, telling traders to own their risks. "Not saying we are perfect, but at this point, smart people actually triple check any negative 'news' on Binance. They are just making stuff up," CZ wrote. He emphasized that compliance flags and police cases, not social media outrage, dictate fund movements, and reiterated that the platform had offered roughly $600 million in compensation post-crash.
As the blame game plays out, market prices reflect the tense sentiment. At the time of reporting, Bitcoin (BTC) traded around $70,096, Ethereum (ETH) near $2,104, and Binance's BNB token around $636, all showing declines over the previous 24 hours.
