Binance Explains $0 Token Prices Were a Display Bug, Not a Market Crash

Jimmy Aki
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On October 12, Binance issued an update stating that a temporary display issue caused several tokens to appear with a value of $0. This announcement came after a week of serious market decline (over $15 billion in liquidations), and the exchange has now assured users that the tokens had not actually lost their value.

This explanation, however, has since fueled competing theories about the root cause.

Conflicting Theories on the Cause of the Incident

During last week’s Friday market downturn, altcoins such as IoTeX (IOTX), Cosmos (ATOM), and Enjin (ENJ) displayed a value of $0 on Binance. This created immediate confusion among traders, as the prices for the same assets remained above $0 on other major crypto exchanges.

Following reactions from traders, the Binance exchange explained that the anomaly was not a result of market manipulation.

Instead, the issue came from a technical adjustment in how prices were displayed. Some trading pairs, such as IOTX/USDT, recently adjusted the number of decimal places allowed for minimum price movement. This configuration change inadvertently caused the display error

However, that explanation didn’t stop the growing controversy as tensions were already high.

Many traders claimed Binance had frozen user accounts at critical moments, preventing them from accessing funds or executing trades.

These reports, combined with claims of disabled stop-loss and limit-order functions, intensified criticisms.

Some critics alleged that the platform’s delays and restrictions allowed it to profit while traders suffered record losses.

Others, however, believed Binance may have been a victim of an exploit.

Well-known trader ElonTrades suggested that attackers might have targeted Binance’s Unified Account system. This system relies on internal order book data instead of external oracles to calculate asset values.

According to this analysis, the system, while designed to improve efficiency, may have become a weak point. The alleged attack reportedly caused Ethena’s synthetic stablecoin, USDe, to lose its peg and drop as low as $0.65 on Binance.

As the system began valuing collateral against these distorted internal prices, a cascade of margin liquidations occurred.

Within hours, an estimated $500 million to $1 billion in forced liquidations hit users across the exchange.

Binance’s $283M Compensation Plan: What Sparked the Widespread Panic?

The broader market context paints part of the picture for severe liquidations.

Just weeks before, on September 22, the global crypto market cap had dropped 2.18% to about $3.88 trillion after Bitcoin slid to $112,000. The bearish move triggered about $1.7 billion in liquidations across major platforms.

However, the situation worsened on October 10. Data from CoinGlass showed that over 1.66 million traders were liquidated within 24 hours. Nearly $19.33 billion in leveraged positions vanished as prices plunged.

Bitcoin fell from above $122,000 to around $113,600 and briefly dipped below $102,000 later that night. It was tagged as the worst 24-hour liquidations in crypto history.

A primary catalyst for this market-wide volatility was the escalating China-US trade tension. Global markets reacted sharply after Donald Trump warned of a “massive increase in tariffs” on Chinese imports, a statement made following Beijing’s announcement of new export restrictions on rare earth elements.

Trump later confirmed plans for 100% tariffs but hinted they could be reversed before November 1 if China softened its stance.

On October 11, Binance co-founder and Chief Customer Support Officer Yi He admitted that the exchange had experienced degraded performance during the high-volatility period.

She also confirmed that Binance was working to make things right. To restore confidence, Binance announced a $283 million compensation package for affected users.

About Jimmy Aki PRO INVESTOR

Based in the UK, Jimmy is an economic researcher with outstanding hands-on and heads-on experience in Macroeconomic finance analysis, forecasting and planning. He has honed his skills having worked cross-continental as a finance analyst, which gives him inter-cultural experience. He currently has a strong passion for regulation and macroeconomic trends as it allows him peek under the global bonnet to see how the world works.