Binance is stuck in the middle of a $19 billion conspiracy theory—and it's killing bitcoin's momentum
Traders blame Binance for the $19 billion Oct. 10 liquidation cascade, which has left crypto market depth thin and eroded trust.Summary
Months after a $19 billion liquidation cascade on October 10 (10/10), which saw Bitcoin drop significantly, market depth has not recovered, and traders are divided over Binance's role. Binance, the world's largest crypto exchange, has become the focal point of accusations, with many blaming it for the crash, especially after Ark Invest CEO Cathie Wood cited a "Binance software glitch." Binance denies responsibility, attributing the event to macroeconomic pressure, high leverage, and illiquid conditions, noting its core systems remained operational and it compensated users.
The lack of transparency surrounding the event has fueled speculation and conspiracy theories, with critics arguing that the compensation offered was insufficient relative to the damage. However, some industry figures, like Wintermute CEO Evgeny Gaevoy, argue that blaming a single exchange is "intellectually dishonest," suggesting the crash was an inevitable result of a highly leveraged market facing illiquid conditions.
The core issue appears structural: crypto markets lack the formal post-mortems common in traditional finance, allowing speculation to thrive amid thin order books and wider bid-ask spreads. While Binance is the easiest scapegoat due to its size, the underlying problem is the market's continued dependence on conditional liquidity and leverage, which evaporated during the stress event.
(Source：CoinDesk)