The tokens did not actually crash to $0, but users saw tokens drop to nearly $0 due to a ‘display’ issue, the Binance exchange said.
Crypto exchange Binance issued an update to users after several tokens on the platform apparently crashed to $0 in the wake of Friday’s market meltdown, saying that the tokens did not actually crash, but showed a $0 price to users due to a “display issue.”
Several altcoins appeared to crash to $0 on Binance during Friday’s market turmoil, including IoTeX (IOTX), Cosmos (ATOM), and Enjin (ENJ), despite the tokens staying well above $0 on other centralized crypto exchanges.
The tokens did not actually lose 100% of their value on the platform, according to an announcement from Binance on Sunday. Binance explained:
“Certain trading pairs, such as IOTX/USDT, recently reduced the number of decimal places allowed for minimum price movement, causing the displayed prices in the user interface to be zero, which is a display issue and not due to an actual $0 price.”
The Binance exchange became the center of controversy, following Friday’s market crash that took out up to $20 billion in leveraged positions — the worst 24-hour crypto liquidation in market history.
Related: Market crash ‘does not have long-term fundamental implications’ — Analyst
Traders speculate Binance may have faced a coordinated attack
Binance may have been the target of a malicious exploit, which caused Ethena’s USDe synthetic dollar to lose its dollar peg on Binance and drop to just $0.65, according to crypto trader ElonTrades, who speculated about the cause of the incident.
The attackers took advantage of digital assets posted to Binance’s “Unified Account” feature that uses oracle data from internal order books as opposed to external oracles, according to ElonTrades.
Binance previously announced that it would fix the issue by sourcing price feeds from external oracles by October 14, giving threat actors a window of opportunity to exploit the mechanism and create major price discrepancies, ElonTrades theorized.
This sparked a cascade of liquidations of up to $1 billion on Binance, which spread to become a market-wide contagion, he concluded.
Binance has already announced a total of $283 million in compensation for victims who were liquidated as a result of the depegging event.
Despite this, Kris Marszalek, the CEO of crypto exchange Crypto.Com, called for regulatory investigations of centralized exchanges that experienced heavy losses during Friday’s historic market crash.
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