Briefing
- Binance, Coinbase, and Kraken suffered major outages during a record $30B liquidation.
- Analysts believe CEXs underreported true losses to avoid panic.
- Accusations of disabled trading tools and pre-positioned shorts have deepened fears of manipulation.
CEXs Struggle as Markets Implode
The crypto market convulsed on October 10 after $30 billion in leveraged positions were wiped out in less than a day. Traders across major platforms reported frozen order books, stalled withdrawals, and broken stop-loss tools just as prices collapsed.
“It wasn’t just a liquidation,” said CryptosR_Us. “It was a stress test for every exchange in crypto.”
Initial figures placed total liquidations near $19 billion, but analysts now say the true number likely surpassed $30 billion. “CEXs often manipulate liquidation reports to limit panic around their systems,” said market watcher Ericonomic. “In reality, this crash exposed how fragile their infrastructure really is.”
As prices plunged, liquidity vanished. Bitcoin fell below $102,000 before clawing back modestly. Altcoins were hit hardest, many losing 70% or more in hours. Millions of traders were left locked out of platforms as markets moved faster than they could react.
Manipulation Fears Spread
Reports of trading restrictions and suspicious activity surfaced within minutes.
Some traders accused Binance of freezing accounts and disabling key tools at the height of the chaos. “Limit orders and stop-loss functions were conveniently disabled,” said one user, adding, During the recent market crash, they froze user accounts across the board, preventing traders from accessing their funds at critical moments.”
Arthur Hayes, former BitMEX CEO, said large exchanges may have auto-liquidated cross-margined positions to shore up balance sheets. Others pointed to unusual wallet activity days before the crash.
KTMudak, an on-chain analyst, reported that “massive short positions opened on BTC and ETH right before the drop.” Shawred0 added that the event “exposed how thin CEX order books really are,” suggesting a handful of players control most of the visible flow.
The pattern has shaken trust in centralized platforms already facing scrutiny after past meltdowns like FTX and Luna. Each failure revives the same question: who really controls the trade?
Decentralization Gains Ground
Amid the chaos, decentralized exchanges became a refuge for traders still able to move assets. “At these crucial moments, users have zero control inside CEXs,” said @cryptohuzzle25. “DEXs are the only real alternative.”
Hyperliquid, one of the few platforms that stayed operational, saw a surge in users during the crash. Analysts say the event accelerated interest in non-custodial models that remove counterparty risk entirely.
Sebassoter, a trader who chronicled the event live, called it “the most brutal crash I’ve ever seen,” citing extreme leverage, tight stops, and fragile infrastructure as the perfect setup for a wipeout.
ChainStreet’s Take
The October 10 crash exposed something deeper than price volatility. When markets cracked, access vanished, apps froze and trust evaporated in seconds. What traders saw was not only a sell-off but a reminder that control inside centralized exchanges can disappear without warning.
That realization is spreading fast. Regulators are already circling, asking how billions in liquidations could unfold with so little transparency. Audits and solvency checks, long delayed, may now be forced into daylight.
Inside Web3, the takeaway cuts sharper: people built these systems to escape that kind of gatekeeping. Now, they’re watching the old habits of Wall Street replayed through a digital lens. Whether users walk away or rebuild depends on what comes next and who they still trust to hold the keys.
