Binance Addresses Flash Crash Liquidations: Are You Eligible for Compensation?

Binance Responds to Market Volatility with Compensation Plan

Binance has announced a compensation plan for users impacted by the extreme market fluctuations on Friday, October 10th, which led to significant liquidations, particularly affecting Ethena's USDe, BNSOL, and WBETH.

Were you affected? If you held USDe, BNSOL, or WBETH as collateral on Binance between 21:36 and 22:16 UTC on October 10th, you might be eligible for compensation. During this 40-minute period, these assets experienced price deviations that triggered automatic liquidations.

What Caused the Liquidation Event?

Binance attributed the incident to unusual volatility and internal platform issues. The exchange is reviewing accounts automatically across Futures, Margin, and Loan products and will process payouts within 72 hours.

The compensation will cover the difference between your liquidation price and the market price at 00:00 UTC on October 11th. Binance will also refund liquidation fees charged during the event.

Key Takeaways:

• Eligibility: Users holding USDe, BNSOL, or WBETH as collateral during the specified timeframe are potentially eligible.
• Compensation: Covers the difference between the liquidation price and the market price at 00:00 UTC on Oct 11th, plus refunded liquidation fees.
• Automatic Review: Binance is automatically reviewing affected accounts.
• Contact Support: For cases outside the defined scope, contact customer support (normal trading losses and unrealized gains are excluded).

Preventative Measures Binance is implementing changes to prevent future incidents, including:

• Modifying price index calculations.
• Establishing a price floor for USDe.
• Reviewing risk settings more frequently.

Industry Reaction Other exchanges have voiced concerns, highlighting the need for regulatory scrutiny of platforms with high liquidation volumes following the widespread market turmoil.