Following President Donald Trump’s announcement of new tariffs, cryptocurrency prices dropped sharply, with Binance—often regarded as the industry’s primary liquidity provider—front and center amidst the turmoil.
Was Binance’s Meltdown Natural or Deliberate?
As values plummeted, traders noted that Binance’s platform froze during the sell-off, hindering their ability to close or hedge their positions. This meant a single margin call could lead to total liquidations rather than just partial losses due to the interconnectedness of assets.
This fundamental flaw incited widespread frustration, with some users accusing Binance of capitalizing on market volatility through liquidation fees. An example of such discontent can be seen in a tweet: “We listen closely, learn from what happened, and are committed to doing better.” Spare it. You keep cross margin as the default because it feeds your liquidation engine…
Though Binance promised compensation to those affected, a comprehensive post-incident report has yet to be made public, leaving a void for speculation. An on-chain researcher, YQ, indicated that the crash might not have been merely a result of market forces.
YQ’s findings revealed that three assets listed on Binance—USDe, wBETH, and BNSOL—lost their pegs simultaneously during an internal pricing update. At this point, USDe dropped to $0.65, wBETH fell to $430 (nearly 90% below Ethereum’s value), and BNSOL decreased to $34.9.
“The 23-minute gap between broad liquidations and the specific asset crashes suggests a sequential execution rather than spontaneous panic,” the analyst noted.
This analysis indicates that such coordinated trades could have siphoned off between $800 million and $1.2 billion from the market. “While we can’t conclusively prove coordination, the evidence raises reasonable suspicion,” he concluded, suggesting the precision and timing of events resembled a well-orchestrated attack.
Coinbase Transfers Heighten Market Coordination Concerns
Amid the focus on Binance, new blockchain data showed that Coinbase, the leading U.S. exchange, also engaged in significant transactions before the market decline.
The analytics firm Meta Financial AI (MEFAI) reported that Coinbase moved 1,066 BTC from a cold wallet to a hot wallet just before prices began to slide. Concurrently, a newly established wallet—believed to belong to a U.S. investor—acquired 1,100 BTC from Binance and transferred it to Coinbase.
“The sales executed through Coinbase are aimed at institutions. Their arbitrage and pricing algorithms stabilize the market. It’s notably challenging for a retail user to offload 1,000 BTC due to the lack of buyers in that sphere,” MEFAI explained.
Despite these assertions, no direct evidence links the actions of Binance and Coinbase. Nonetheless, the coincident wallet activities, their timing, and the sharp market implications have amplified community suspicions that the downturn wasn’t merely accidental.
