Shocking Crypto Liquidations: Urgent Probe Demanded After $20 Billion Market Crash

The cryptocurrency market recently experienced a truly unprecedented event. A staggering $20 billion in crypto liquidations occurred within 24 hours. This massive downturn has prompted a strong reaction from industry leaders. Kris Marszalek, CEO of Crypto.com, has called for an urgent regulatory investigation into exchanges. This significant market volatility far surpasses any previous crash, including the FTX collapse.

Unprecedented Crypto Liquidations Spark Outcry

Crypto.com CEO Kris Marszalek urged regulators to act swiftly. He posted his concerns on X, advocating for a thorough review of exchange practices. Marszalek questioned whether trading platforms slowed down during the crash. He also asked if assets were mispriced. Furthermore, he raised concerns about anti-manipulation and compliance controls. This unprecedented scale of crypto liquidations demands immediate attention.

Data from CoinGlass highlights the severity of the situation. Hyperliquid led all exchanges in wiped-out positions, recording $10.31 billion. Bybit followed with $4.65 billion. Binance also saw substantial losses, totaling $2.41 billion. Other major platforms experienced significant, though smaller, totals:

• OKX: $1.21 billion
• HTX: $362.5 million
• Gate: $264.5 million

This market event has left many investors reeling. It also brings crucial questions about market integrity to the forefront.

Scrutiny on Major Crypto Exchanges

Marszalek’s call for a regulatory probe crypto specifically targets platforms with the highest liquidation volumes. He wants to ensure fair trading practices. He also seeks confirmation that all trades were priced correctly. This level of scrutiny aims to protect users. It also reinforces trust in the digital asset ecosystem. The integrity of crypto exchanges is paramount for market stability. Regulators must assess if any platforms failed to uphold their responsibilities during the chaos. This review could shape future operational standards across the industry.

Binance Liquidations and User Compensation

Binance confirmed a price depeg incident contributed to forced liquidations. Ethena’s USDe (USDE), BNSOL, and WBETH were involved. This incident affected some users directly. The exchange is currently reviewing affected accounts. They are also planning appropriate compensation measures. Users had reported losses due to platform errors. One Binance trader claimed the exchange closed their short position but left their long open. This resulted in a total loss for the user. They noted similar trades on other platforms survived the crash. This specific issue highlights the critical need for robust system performance during high volatility.

Binance co-founder Yi He publicly acknowledged user complaints. She cited significant market fluctuations and a substantial influx of users. Binance will compensate verified cases where platform errors caused losses. However, losses from market fluctuations are not eligible. This distinction is crucial for understanding the scope of compensation for Binance liquidations.

Understanding the Crypto Market Crash Catalyst

The recent market meltdown followed a significant geopolitical announcement. US President Donald Trump declared plans for 100% tariffs on Chinese imports. These tariffs are set to begin on November 1. This move responds to China’s new export restrictions on rare earth minerals. China supplies approximately 70% of the world’s rare earth minerals. They recently stated that products with over 0.1% Chinese rare earths will require an export license. This measure takes effect on December 1. Trump criticized Beijing’s policy as ‘a moral disgrace.’ He also hinted at canceling a meeting with President Xi Jinping. This geopolitical tension directly contributed to the broader crypto market crash.

The Call for a Regulatory Probe into Crypto Practices

Crypto.com CEO Kris Marszalek’s demand for a regulatory probe crypto is a critical development. It underscores the growing need for accountability in the digital asset space. The record-breaking $20 billion in liquidations has exposed potential vulnerabilities. Regulators must now evaluate if existing controls are sufficient. They must also determine if new safeguards are necessary. This investigation aims to restore confidence. It will also work to prevent similar events in the future. The outcome could significantly influence the regulatory landscape for all cryptocurrency operations globally. Ensuring transparency and fairness remains a top priority for the industry.