Rebecca Cruz Binance says tokens did not crash to $0 during Friday’s selloff, clarifying that a display issue in its trading interface caused misleading zero prices. The crypto exchange also compensates users impacted by the glitch.
Binance says tokens did not crash to $0 amid massive selloff confusion
Crypto markets were sent into chaos on Friday when several tokens on Binance appeared to crash to zero. Traders were left stunned as prices for major altcoins such as IoTeX, Cosmos, and Enjin displayed $0 on their screens. But according to Binance, the crash never actually happened. In a clarification shared on Sunday, Binance says tokens did not crash to $0, attributing the panic to a technical display glitch rather than real market activity.
The statement from the world’s largest crypto exchange sought to calm nerves after one of the most volatile trading sessions of the year. Binance confirmed that token prices and user balances remained intact throughout the episode, even though the interface displayed zero values for some trading pairs.
Binance says tokens did not crash to $0 due to a display bug
The official explanation from Binance says tokens did not crash to $0 but instead suffered from a temporary interface error. According to the exchange, the glitch was triggered by a change in how certain trading pairs, such as IOTX/USDT, handled decimal places for minimum price movement.
When Binance modified the configuration, it unintentionally caused the price display in the user interface to round down to zero. However, the exchange emphasized that all backend systems, including balances and order books, continued to reflect accurate market data.
In essence, the problem was cosmetic, not structural. Binance reassured users that trading operations, risk management, and liquidation mechanisms functioned normally. No actual trades were executed at zero prices, and no token truly lost all its value.
Traders suspect possible exploit despite Binance clarification
While Binance says tokens did not crash to $0, some market participants believe the issue may have been more than just a display problem. Prominent crypto trader ElonTrades suggested that the exchange could have been targeted by a sophisticated exploit during the same window when its “Unified Account” system relied on internal oracle data.
The trader theorized that attackers might have exploited Binance’s internal pricing structure, which uses data from its own order books instead of external oracles. The timing of the event added weight to the theory since Binance had previously announced plans to transition to external price feeds by Tuesday.
If true, the exploit could have created significant price imbalances, triggering forced liquidations across leveraged positions. Reports circulating on social media suggested that the cascading liquidations reached nearly $1 billion in value, fueling the broader selloff that rocked the crypto market on Friday.
Binance compensates affected users as industry calls for clarity
Even as Binance says tokens did not crash to $0, the company moved quickly to mitigate fallout from the confusion. It announced a compensation package of $283 million for traders who faced losses linked to the depegging of Ethena’s synthetic dollar, USDe. The asset had briefly dropped to $0.65 on Binance during the turmoil, raising further questions about the accuracy of price feeds.
Binance’s prompt response and willingness to compensate victims drew mixed reactions from the crypto community. Some praised the move as an example of responsible exchange management, while others said it exposed deeper issues around transparency in centralized trading systems.
Kris Marszalek, CEO of CryptoCom, called for a formal review of major exchanges that experienced similar disruptions during Friday’s historic crash. His comments highlighted growing concerns that centralized exchanges may still be vulnerable to system-level errors or exploit scenarios that can ripple across the market in seconds.
Market rebounds but trust takes a hit
Following the clarification that Binance says tokens did not crash to $0, prices for affected assets rebounded as traders regained confidence. However, the incident reignited debate about how much trust users should place in centralized exchanges.
Crypto veterans argue that while Binance handled the situation efficiently, the episode demonstrates the importance of external oracles and independent data verification. As DeFi platforms and hybrid trading infrastructures continue to evolve, reliance on internal data streams may become an outdated practice.
The display issue may have been resolved, but the reputational challenge lingers. Traders want assurance that future price feed adjustments or system updates will not trigger misleading visuals that can cause panic selling or unnecessary liquidations.
What comes next for Binance
The announcement that Binance says tokens did not crash to $0 may have restored short-term calm, but it also pushed the exchange to accelerate its technical upgrades. The move to adopt external oracle feeds for all Unified Account features is expected to be completed within days.
Analysts predict that Binance’s transparency in communicating about the issue could help restore investor confidence. Still, many believe that regulators and industry watchdogs will keep a close eye on how major exchanges handle data accuracy going forward.
The Friday glitch serves as a stark reminder that even the most advanced platforms are not immune to unexpected errors. While no real crash occurred, the fact that traders saw their portfolios momentarily display zero balances was enough to shake the market’s composure.
For Binance, the incident is both a cautionary tale and an opportunity to reaffirm its leadership by delivering stronger safeguards and better user communication in future market events.
Disclaimer: Parts of this article were generated with the assistance from AI tools and reviewed by our editorial team to ensure accuracy and adherence to our standards.
