Unknown crypto trader is facing a staggering $3.79 million loss after Binance implemented updates to its leverage and margin tiers on some digital assets.
Leverage and Margin Risks in Crypto Trading
The incident serves as a cautionary tale for crypto traders, particularly those who engage in high-risk leveraged trading. While leverage allows traders to amplify their potential profits, it also exposes them to the risk of greater losses, especially in volatile markets where asset prices can swing dramatically in short periods of time.
The massive liquidation losses seen in the wake of Binance’s policy change highlight the importance of risk management strategies, including proper position sizing, stop-loss orders, and continuous monitoring of market conditions. Traders who fail to adjust their strategies in response to sudden changes in leverage settings are at risk of significant losses, as demonstrated by the $3.79 million liquidation.
The Impact of Binance’s Leverage and Margin Tier Updates
The move, which took effect on April 1, 2025, has caused significant disruptions among investors holding certain tokens, particularly the Acet (ACT) token, highlighting the risks associated with sudden changes in leverage policies.
According to a post from Lookonchain, Binance’s recent decision to update its leverage and margin tiers for ACT tokens resulted in substantial losses for traders who had not adjusted their positions in time. The update led to a sharp price crash for ACT, dropping to $0.1877 from previous higher levels, and affecting investors who had leveraged their positions.
One crypto trader, in particular, faced a massive liquidation loss of $3.79 million as a result of the sudden price decline. This event underscores the risks associated with trading on margin and using leverage in volatile markets, where rapid adjustments in exchange policies can lead to catastrophic financial consequences.
Additional Losses from the ACT Price Crash
The damage wasn’t limited to just one trader. Another investor suffered a nearly $2.17 million loss due to the ACT price crash. According to Lookonchain, this individual’s holdings, which were valued at $2.49 million just a few months ago, had plummeted to only $320,000 when the update occurred, resulting in a significant financial blow.
The event has sparked discussions within the crypto community about the potential dangers of high-leverage trading, particularly when sudden exchange policy changes occur without prior warning or adequate preparation for traders. This incident also highlights the dominant role that Binance plays in the crypto ecosystem, with its decisions on listing, delisting, and trading parameters influencing the broader market.
Looking Ahead
As the crypto market continues to evolve, traders and investors must remain vigilant about the potential impacts of changes in exchange policies, especially those related to leverage and margin. With the rise of institutional involvement and growing regulatory scrutiny, exchanges like Binance will continue to play a pivotal role in shaping the market, and their actions will have wide-ranging consequences for both retail and institutional investors.
For now, the affected traders’ losses serve as a stark reminder of the inherent risks in crypto trading, particularly when leverage is used, and the need for careful, informed decision-making in a volatile environment.
Kosta Gushterov
Reporter at Coindoo
Kosta has been a part of the team since 2021 and has solidified his position with a thirst for knowledge, incredible dedication to his work and a “detective-like” mindset. He not only covers a wide range of trending topics, he also creates reviews, PR articles and educational content. His work has also been referenced by other news outlets.
Source: https://coindoo.com/crypto-trader-lost-3-8-million-after-using-leverage/