The Biggest Crypto Crash in History: What Happened in October 2025
The crypto market experienced one of its worst crashes ever between October 10 and 11, 2025. In just hours, billions of dollars disappeared from major exchanges:
- Hyperliquid: $10.31 billion in liquidations
- Bybit: $4.65 billion
- Binance: $2.41 billion
These losses were even greater than those during the FTX collapse or the 2020 market crash.
The crash began after Donald Trump announced a 100% tariff hike on Chinese imports, triggering panic in financial markets. The crypto market was hit especially hard due to a dangerous mix of high leverage trading (up to 100x), token price depegs (like USDe and WBETH), and extreme volatility. Many traders saw their accounts wiped out within hours, and some exchanges even froze withdrawals temporarily.
Crypto Exchanges Under Fire
After the crash, exchanges like Binance, Bybit, and Hyperliquid faced heavy criticism. Users reported frozen platforms, unexecuted trades, and incorrect price data.
Kris Marszalek, CEO of Crypto.com, called for an investigation, accusing some exchanges of poor crisis management and possibly misleading practices.
Among them, Hyperliquid drew special attention since it had the highest number of liquidations. Binance also faced backlash, especially after several of its tokens lost their stable values (depegged).
Binance Pays $283 Million in Compensation
On October 12, 2025, Binance announced that it would compensate users with a total of $283 million. The payments went to traders affected by the depegs of:
- USDe (Ethena)
- BNSOL (Binance Solana)
- WBETH (Wrapped Beacon ETH)
The compensation covered losses from October 10, 21:36–22:16 UTC, including those affected during internal transfers and Binance Earn redemptions.
Binance said the token depegs—like USDe dropping to $0.66—happened after the crash, not before, rejecting claims of a targeted attack. Still, the company admitted several technical problems, including:
- Old limit orders (some from 2019) that worsened price drops;
- Display bugs that falsely showed some assets dropping to $0 (like IOTX/USDT);
- Possible oracle system issues that may have distorted prices before Binance switched to external oracles on October 14.
To prevent future incidents, Binance promised to:
- Add buyback prices to its market indices;
- Create a price floor for USDe;
- Review its liquidation mechanisms.
Should Exchanges Compensate or Prevent Crises?
This crash raised an important question:
Should crypto exchanges only pay users after disasters—or must they prevent them in the first place?
Binance’s $283 million payout was a positive gesture, but it doesn’t erase the technical and organizational failures that caused so much damage.
Over 1.6 million traders were affected, and both Bitcoin and Ethereum saw huge losses. Some investors lost millions of dollars in minutes.
To protect users and stabilize markets, exchanges must now focus on:
- Regular audits,
- Emergency “circuit-breaker” systems,
- Limits on extreme leverage.
Regulators like the SEC (U.S.) and AMF (Europe) are expected to enforce stricter rules to prevent future crises. Investor trust will depend on how well exchanges can balance innovation with safety.
A Turning Point for the Crypto Industry
The October 2025 crash may mark a major turning point for the crypto world. Once seen as untouchable, exchanges are now under intense scrutiny.
Public calls for stronger regulation are growing louder, but action remains slow. Trust—once lost—won’t be easy to rebuild. If exchanges and regulators don’t act soon, traders might move toward more transparent platforms or even leave the market altogether.
The big question now:
Can centralized exchanges still be trusted after such a massive failure?
