Crypto's $19 Billion '10/10' Nightmare: Why Binance Still Bears the Blame

$19 billion vanished in a single day. Four months later, that number still haunts crypto traders who watched their positions get liquidated on October 10th—a day now burned into market memory as "10/10."

While bitcoin crashed 12.5% in its worst single-day drop in 14 months, something more troubling emerged: the market structure that broke that day never fully healed.

The Exchange Everyone's Blaming

All roads lead to Binance. The world's largest crypto exchange has become the face of October's catastrophe, whether fairly or not. As bitcoin tumbled from around $125,000, leveraged positions cascaded into forced liquidations across major exchanges.

But it's what happened next—and what didn't get explained—that's kept traders angry. Market liquidity remains thin and fragmented. Order books haven't fully rebuilt. The spread between buy and sell prices stays wider than before. Many blame this weakened infrastructure for bitcoin's slide to $80,000.

Ark Invest CEO Cathie Wood recently added fuel to the fire, telling Fox Business that "a Binance software glitch" triggered roughly $28 billion in deleveraging. Binance co-founder He Yi pushed back online, though the post was later deleted.

Competitors seized the moment. OKX founder Star Xu wrote that October 10th caused "real and lasting damage to the industry." Meanwhile, challengers like decentralized exchange Hyperliquid highlighted their growing derivatives volume, positioning themselves as alternatives while Binance faces reputational damage.

The Transparency Gap Fueling Conspiracy

Binance maintains the crash wasn't their fault. During a Friday AMA, co-founder and former CEO Changpeng "CZ" Zhao called suggestions that Binance caused the crash "far-fetched." The company blamed "market factors"—macroeconomic pressure, high leverage, illiquid conditions, and Ethereum network congestion.

Binance says its core systems stayed operational and paid roughly $283 million in compensation to affected users. For many traders, that figure feels insulting compared to the $19 billion in liquidations.

"This is a f***ing joke," wrote pseudonymous Bitcoin Realist on X. "You...liquidated 19 billion on 10/10 alone... This is like spitting in our faces."

The anger reflects something deeper than a single volatility event. For many, 10/10 has become a symbol of distrust in crypto market structure itself.

Not Everyone Agrees on the Villain

Not all market participants buy the Binance-as-scapegoat narrative. Wintermute CEO Evgeny Gaevoy pushed back: "10/10 was very obviously not a 'software glitch.' It was a flash crash on mega leveraged market on illiquid Friday night driven by macro news."

His argument is straightforward: Crypto remains structurally leverage-heavy, and liquidity is conditional. Market makers widen spreads or step back during stress. In thin conditions, liquidations accelerate. Binance may have been the largest venue where the crash played out, but not necessarily its source.

What's missing is official investigation. Former CFTC regulator Salman Banaei suggested October 10th warrants scrutiny, comparing it to the May 6, 2010 stock market flash crash. "A benefit of regulation is that the risk of such investigations deters manipulation," he wrote, though he wasn't alleging wrongdoing.

The Deeper Structural Problem

October 10th may ultimately be remembered less for the liquidation number than for what it revealed about market architecture. In bull markets, order books are thick and leverage builds quietly. Bear markets expose the opposite—thin liquidity, retreating market makers, and concentrated volatility.

Ether.fi CEO Mike Silagadze captured the mood: "This seems so much worse than the post-FTX landscape. The fundamentals in some ways are stronger than ever, but price action has zero bids."

Former NYSE Arca options trader Eric Crown offered a blunter assessment: "High amounts of leverage, low amounts of liquidity, generally useless or unwanted altcoin 'technologies' is a recipe for a massacre and that's exactly what happened. It was always a question of when, not if."