At the same time, several major oracles began showing inconsistent price data, liquidity across exchanges evaporated, and many users reported being unable to access trading platforms to buy the dip or close positions.
Furthermore, crypto data platforms like CoinGecko were either offline or displaying incorrect information, so users had no data about the crash. According to Neuner’s assessment, this was not a string of isolated glitches but a chain reaction of failures happening simultaneously across the ecosystem. This looked like some players had pulled the right levers at exactly the right time, and the crash “was a highly coordinated and well executed attack.”
According to ElonTrades, Binance’s Unified Account system, which allows traders to use multiple assets as collateral for leveraged positions, had been operating with a significant vulnerability. Instead of relying on external oracle feeds or stable redemption values to mark collateral, the exchange used its own order-book prices. This meant that if someone could manipulate the price of a collateral asset within Binance, they could instantly devalue billions of dollars in margin accounts.
Binance had already announced plans to move to oracle-based pricing, but the rollout wasn’t until October 8. Some traders began dumping $60million to $90 million of USDe and other tokens like wBETH and BNSOL on Binance to force their internal prices down, even though those same assets maintained normal value elsewhere. The artificial plunge in price caused the platform’s margin system to view thousands of leveraged accounts as under-collateralized and caused automatic liquidations.
That localized depeg triggered between $500 million and $1 billion in forced liquidations. At the same time, these actors opened $1.1 billion in BTC/ETH shorts on Hyperliquid to take advantage of the depeg, which eventually netted $192 million in profit. Just as the forced liquidations began, Trump’s 100% tariff announcement hit global headlines, adding panic and confusion to the mix. Within hours, the liquidation chain had spread to other exchanges.
