Crypto Collapse: Was the Binance Crash a Planned Attack?

Crypto Collapse: Was the Binance Crash a Planned Attack?

The crypto market experienced a dramatic crash on October 11, 2025, which may have been due to a coordinated attack. According to reports from Wu Blockchain, a vulnerability in Binance's margin system may have been exploited, resulting in a massive loss of value. This resulted in serious depegging phenomena for important stablecoins such as USDE, wBETH and BnSOL, whose prices fell to a shocking $0.65, $0.20 and $0.13.

Binance's permission for yield coins to be used as collateral played a crucial role. This regulation increased liquidations and made the market more vulnerable to manipulation. Attackers targeted specific collateral, which subsequently led to massive liquidations and a surge in trading activity, amounting to between $3.5 billion and $4 billion on Binance within 24 hours.

Effects and conclusions

The estimated financial losses for Binance could be between $500 million and $1 billion. These serious sums highlight the risk associated with using PoS derivatives and yield-producing stablecoins as uniform margin collateral. It became apparent that the liquidation prices were based on Binance's in-house order book and not on fixed values, which further aggravated the situation.

While Bitcoin and other altcoins posted drastic losses, many derivatives traders had to deal with mounting losses. The drop in coin prices also led to a further loss of value in the margin system. In this context, market participants had to close and liquidate all their positions, adding to the turbulence in this already tense market.

Particularly noticeable was the high selling pressure on USDE, which was reinforced by a yield program from Binance that offered a 12% interest rate. This program encouraged larger stablecoin holders to engage in recursive lending, which further pushed the price of USDE on Binance below the prices of other centralized exchanges, where the stablecoin mostly traded above $0.90.

Market analysis and recommendations

Investor Mindaoyang drew parallels between this incident and the LUNA collapse in 2022, as both events pointed to the acceptance of “non-fiat” stablecoins as high-risk collateral. There are already recommendations in the professional community that liquidation oracles for PoS-based native assets should maintain fixed floor prices to avoid similar incidents in the future.

BitMine's Tom Lee noted that the market pullback was overdue after a 36% rise since April, while the VIX fear index rose 29%. This marks the 51st most significant single movement day in history, ranking in the top 1% of extreme events. The market context remains tense, with analysts recommending closer monitoring of security practices at centralized exchanges like Binance.

Overall, the incident not only reveals the dangers of margin trading, but also raises questions about the stability of the entire crypto market. The impact of the crash will certainly need to continue to be discussed and analyzed in order to minimize future risks.

For more information about the events, see reports from Crypto News.