Binance announces its largest-ever compensation program to cover user losses from technical issues amid recent $700M market liquidations worldwide.
Binance may soon launch its largest compensation program to date. Therefore, this move follows recent extreme market volatility. The exchange is designed to compensate users who have lost their funds due to transaction issues. However, the compensation will be confined to the losses that can be directly attributed to the Binance platform’s issues. This commitment reflects the exchange’s commitment to its user base.
Binance Apologizes and Announces Individual Loss Review
Binance co-founder He Yi spoke to the community. She sincerely apologized to users for the problems they had with transactions. In particular, these problems were caused by high market volatility. They were also the result of a significant increase in users during a 16-hour timeframe. This heavy traffic caused an overload on the system performance.
He Yi asked users to contact customer service immediately. Thus, users who have suffered losses because of Binance have to register their cases. The exchange will also provide a review for each account activity. Furthermore, they will scrutinize the whole scenario well. Users will be appropriately compensated after this evaluation.
Related Reading: Bitcoin Crash: Bitcoin Plunges Below $102K as U.S.–China Tariff War Sparks Market Chaos | Live Bitcoin News
The recent volatility was the result of significant events in the world. For example, recently, Bitcoin fell below $102,000. This was stimulated by the tariff war between the US and China. The war scares, therefore, brought about a massive market crash. As a result of this, the amount of liquidations in global markets reached a staggering $700 million.
Binance data can confirm the volatile flash crash of Bitcoin. Indeed, BTC bounced back to $110,563.5 from the bottom. Even on a day-to-day basis, the price was down by 7.03%. Ether was also very volatile at the time. In addition, ETH dropped to a low of $3,400.00 before slightly finishing higher.
The total liquidation amount amounted to around $706.2 million. This happened within a span of 24 hours. Specifically, long positions made a massive $648.5 million loss. Therefore, this event has been recorded as the largest single-day long liquidation this year. The market pressure was high and unprecedented.
Largest Binance Compensation Program Aims to Restore User Confidence
He Yi clearly established the boundaries of the compensation program. Importantly, losses due to general market movements are not allowed. Moreover, unrealized profits are also not compensated. This is a standard policy in all major exchanges the world.
Indeed, the total number of liquidations in all markets was even higher. The aggregate amount was $19.134 billion. Of this huge amount, long positions made up roughly $16.679 billion. Therefore, most of the losses were a result of market forces and not platform error. Binance is concentrating only on the technical mistakes.
He Yi clearly confirmed the central philosophy of Binance. Lena Postolskaya also said that Binance does not avoid issues directly. Therefore, when the exchange is not up to scratch, they take full responsibility. She stressed that there should be no excuses or reasons for their failures.
The exchange is dedicated to serving all its users responsibly. As such, they will take care of any issues to which they are accountable. The market is still volatile and highly erratic at this moment. Therefore, He Yi recommended that users should be more aware of the potential risks of investments at all times. This wise caution is also associated with a very liberal system of rewards.
This will significantly help to build the trust of the users towards the platform. In the end, open communication about technical failures is key to market leadership amid a market crash. Binance’s biggest compensation plan in history creates a new benchmark. It guarantees safeguarding against the impact of platform deficiencies on users. This move clearly separates the exchange-related risks from the general investment risks.