TLDR
- $20 billion in liquidations hit crypto exchanges, outpacing previous crashes.
- Crypto.com CEO Marszalek urges regulators to investigate exchange practices.
- Hyperliquid led the market with $10.31B in liquidations during the crash.
- Binance acknowledges errors and promises compensation for affected users.
Crypto.com CEO Kris Marszalek has called for a regulatory investigation into cryptocurrency exchanges following the liquidation of $20 billion in positions over 24 hours. The record figure has raised concerns about the fairness and transparency of trading practices. Marszalek has urged authorities to investigate whether platforms mismanaged assets or failed to implement necessary safeguards during the crash.
Crypto Market’s $20B Liquidation Event
In a recent post on X, Marszalek emphasized the scale of the losses and questioned the actions of exchanges that saw the highest liquidations. According to Marszalek, regulators should examine exchanges to ensure that they did not slow down operations or misprice assets during this event. “Regulators should look into the exchanges that had the most liquidations in the last 24 hours,” he wrote, stressing the importance of fairness and transparency.
Data from CoinGlass indicates that Hyperliquid led the market with a staggering $10.31 billion in liquidations, followed by Bybit at $4.65 billion and Binance with $2.41 billion. Other exchanges, including OKX, HTX, and Gate, saw smaller losses, but they still contributed to the overall $20 billion wipeout. This mass liquidation has far outpaced previous market crashes, including the FTX collapse, which saw around $1.6 billion in liquidations.
Binance’s Response to User Complaints
Amid the market chaos, Binance confirmed an incident that contributed to user losses. The exchange reported that price discrepancies involving Ethena’s USDe, BNSOL, and WBETH tokens led to forced liquidations for some users. Binance stated that it was reviewing the affected accounts and would offer compensation where platform errors were found.
Several users have come forward, claiming that their trades were mishandled during the crisis. One user noted that Binance closed their short position but left their long position open, resulting in significant losses.
Binance co-founder Yi He acknowledged these complaints, citing substantial market fluctuations and an influx of users during the event. She clarified that losses due to market conditions would not be eligible for compensation, but platform-related errors would be reviewed.
Investigating Exchange Practices During the Crash
The $20 billion in liquidations has drawn scrutiny over the practices of crypto exchanges during volatile market conditions. Kris Marszalek’s call for an investigation into whether platforms slowed down operations or mispriced assets during the crash has sparked debate about the responsibility of exchanges in protecting users from market fluctuations
He pointed out that regulators need to assess if platforms maintained adequate anti-manipulation measures and compliance controls throughout the downturn.
While large exchanges like Binance and Bybit experienced massive losses, the incident has also raised questions about the broader transparency of the crypto industry. Marszalek’s call for a thorough review could lead to increased regulatory oversight, ensuring that exchanges are held accountable for their actions, especially during times of market stress.
Broader Market Context and Economic Influences
The massive liquidations in the crypto market come at a time of heightened global economic uncertainty. Recently, U.S. President Donald Trump announced plans to impose 100% tariffs on Chinese imports, which sent shockwaves through various markets. The announcement was followed by China’s decision to limit exports of rare earth minerals, further compounding market volatility.
These events have contributed to an environment of heightened risk, which has directly impacted the crypto market. The liquidation event is not only a result of internal exchange issues but also a reflection of broader economic and geopolitical factors that are influencing investor behavior.
As the investigation into exchange practices continues, industry experts and users alike will be closely monitoring the outcomes to ensure that the crypto market operates fairly and transparently moving forward.
