The $19 billion crypto disaster: How Binance is being blamed for Bitcoin’s ongoing slump

Months After $19 Billion Crash, Binance Remains at Center of Bitcoin Turmoil

Months after the Oct. 10 liquidation cascade, crypto markets are still feeling the effects, and traders remain divided over Binance’s role as Bitcoin continues to slide.

At first, the $19 billion wipeout looked like a routine chain of forced liquidations across major exchanges, as BTC dropped to around $79,254.20. But the scale of the sell-off—the largest single-day liquidation in crypto history—and the lack of transparency have frustrated traders and reshaped market behavior.

Binance, the world’s largest crypto exchange, has become a focal point. Bitcoin fell as much as 12.5% that day, the steepest drop in 14 months, forcing leveraged positions to close. Social media has repeatedly pointed to Binance, citing its size, derivatives dominance, and opaque operations.

Binance denies responsibility, attributing the crash to market factors like macroeconomic pressure, high leverage, illiquid conditions, and Ethereum network congestion. Co-founder Changpeng “CZ” Zhao called suggestions the exchange caused the crash “far-fetched,” noting that roughly $283 million was paid to affected users.

Critics remain unconvinced. The $19 billion figure has symbolic weight, and payouts are seen as insufficient. Ark Invest CEO Cathie Wood blamed a “Binance software glitch” for $28 billion in deleveraging, while Binance co-founder He Yi clarified the exchange does not serve U.S. users. Competitors like OXK and Hyperliquid have used the opportunity to highlight market weaknesses and position themselves as alternatives.

Others argue Binance is a convenient scapegoat. Wintermute CEO Evgeny Gaevoy described Oct. 10 as a flash crash caused by high leverage in thin markets, not an exchange-specific failure. The broader issue is structural: crypto remains heavily leveraged, liquidity is conditional, and market makers retreat under stress, amplifying volatility.

The transparency gap fuels speculation. Former CFTC regulator Salman Banaei called for a formal investigation, noting the lack of post-mortems leaves room for rumors. Traders like Flood have suggested ongoing sell pressure from major exchanges, further eroding trust.

Ultimately, many see Oct. 10 as a warning about market structure, not a single exchange. Eric Crown, former options trader, summarized: “High leverage, low liquidity, and risky altcoins created a perfect storm—and that’s exactly what happened.”

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