Binance has paid out a staggering $283 million in compensation after a sharp market swing caused several tokens to lose their pegs on Friday.
Binance, the world’s largest cryptocurrency exchange, has paid out more than $283 million to users affected by last Friday’s wave of token “depegs” – a sudden loss of price stability that triggered liquidations and panic across the crypto market.
According to Binance, the issue unfolded during a 40-minute period of extreme volatility between 21:36 and 22:16 UTC on the 10th October 2025, when several assets on its Binance Earn platform, including USDe, BNSOL and WBETH) briefly detached from their intended values.
The biggest shock came from USDe, a synthetic dollar-pegged token that fell to around $0.66 on Binance. Because some traders used these assets as collateral for leveraged positions, the price drop triggered forced liquidations and heavy losses within minutes.
How the Incident Unfolded
Binance said the wider market crash happened first, with the depegging that followed being a secondary effect of thin liquidity and automated selling. During the turbulence, a number of dormant limit orders, some placed years ago, were automatically filled at unrealistic prices, worsening the swings even more.
A display glitch briefly showed certain tokens, such as IOTX/USDT, trading at zero, although Binance later clarified that order-book data remained accurate and that only the visual interface was affected.
Despite maintaining that its matching engines and APIs continued to operate normally, Binance admitted its systems were under “exceptional strain” during the event, leading to delayed executions and pricing anomalies.
Binance’s Response
In a statement on Saturday, Binance confirmed that it had already distributed two compensation batches totalling $283 million to users whose accounts were verifiably affected by the event. It also said it would continue processing additional user claims over the coming days.
To prevent similar issues, Binance plans to adjust how collateral assets are priced on its platform, introduce “soft floors” for pegged tokens like USDe and refine how indexes are calculated during rapid market movements.
Crypto Industry Reaction
The incident has resurfaced the debate over the stability of synthetic and wrapped assets and whether major exchanges have enough safeguards to prevent small technical issues from cascading into large losses.
Whilst Binance has been praised for swiftly compensating users, analysts say the episode showed how interconnected and fragile crypto markets are, especially during periods of high leverage.
In the meantime, regulators around the world are tightening scrutiny on exchanges.
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