- Tariff shock sparked a crypto selloff; liquidations surged across venues.
- CoinGlass says Binance underreported liquidations 20× due to API limits.
- Binance reviews compensation after USDe, BNSOL, WBETH depegs.
Binance confirmed it is reviewing a compensation plan for users affected by forced liquidations that followed the sudden depegging of USDe, BNSOL, and WBETH. Each token lost its peg as volatility surged following Trump’s 100% China tariff threat.
Forced liquidations cascaded through Binance Futures, wiping leveraged positions in seconds. The exchange told users it is examining account data, loss thresholds, and repayment mechanics.
Executives added that internal risk-management tools will be recalibrated to prevent another chain of forced sales. The goal, they said, is to restore user confidence in Binance’s liquidation controls after a week of market stress.
Related: Why the Crypto Market is Down Today: Trade Fears, Liquidations, and Technical Weakness
How Did Trump’s Tariff Shock Amplify Crypto Market Volatility?
President Donald Trump announced plans to impose a 100% tariff on Chinese imports starting November 1, 2025, or earlier.
His post accused China of using rare-earth export controls as economic weapons. The statement spooked global markets already sensitive to inflation and liquidity risk.
Within minutes, Bitcoin slid more than 10%, Ethereum 17%, and XRP 33%. Derivatives traders scrambled to unwind exposure as cross-exchange liquidations surged.
Analysts called it the year’s first macro-driven crypto crash, linking political rhetoric to market fragility.
CoinGlass Accuses Binance of Hiding True Liquidations
Hours later, CoinGlass posted that Binance’s reported liquidation totals were “10 to 20 times lower” than reality.
The data firm said Binance’s WebSocket API restricts output to one liquidation per second, even when thousands occur.
That throttle, CoinGlass explained, means most forced trades vanish from public data feeds during crashes. The firm shared logs showing large gaps between actual market flow and the figures shown on Binance dashboards.
Crypto analyst Marty Party amplified the claim, writing, “Binance liquidations are 20× higher than they report.” Traders reading the thread compared CoinGlass heatmaps with Binance feeds and found consistent omissions.
Have Other Exchanges Faced Similar Data Gaps?
Yes. In February 2025, Bybit CEO Ben Zhou said his exchange’s internal records showed $2.1 billion in liquidations while aggregators displayed only $333 million.
He blamed identical API throttles used by Binance, OKX, and Bybit to manage bandwidth during volatility spikes.
Analyst Vetle Lunde of K33 Research later called public liquidation feeds “unreliable since 2021.” Lunde said the lack of real-time transparency distorts leverage data and inflates trader risk appetite. He urged exchanges to publish verified liquidation ledgers or open their websocket intervals for auditing.
Related: Binance’s CZ Calls for Dark Pool Perpetual DEX After James Wynn’s Liquidation Event
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Source: https://coinedition.com/binance-under-fire-as-coinglass-flags-20x-liquidation-gap/