Cryptocurrency exchange Binance has disbursed $283 million in compensation to users affected by a severe market downturn last Friday, during which several collateral assets on its platform lost their price pegs. The move comes as the broader crypto market begins to stabilize, with Bitcoin recovering to trade above $114,000.
The compensation addresses losses incurred by traders who used assets like Ethena's stablecoin (USDe), BNSOL, and WBETH as collateral in futures, margin, and loan products. During a period of extreme volatility on Friday, these tokens de-pegged, with USDe, for instance, briefly falling below $0.66 on the exchange. This triggered a wave of liquidations for affected users.
In response, Binance executives apologized and took responsibility. "When we fall short, we take responsibility—there are no excuses or justifications," said Binance co-founder Yi He. The exchange clarified that the compensation, distributed in two batches, covers all verified losses for users impacted during a specific window on October 10. While taking responsibility for the impact on its users, Binance maintained that the event was caused by "macro-driven volatility" and thin liquidity, rather than a fundamental failure of its platform. The exchange also noted that the broader market crash preceded the severe de-pegging of the assets.
The incident was part of a historic market wipeout that saw over $19 billion in leveraged positions liquidated in a single day, affecting more than 1.6 million traders. However, the market has since shown signs of a resilient recovery.
After plummeting below $105,000 during the crash, Bitcoin has bounced back, climbing 3% in the past 24 hours to trade at approximately $114,700. Ethereum also demonstrated a strong rebound, surging 8.5% to over $4,100 after briefly touching a low of $3,500.
Analysts suggest the recovery is partly mechanical, as the massive deleveraging event has "flushed out" excessive risk, allowing the market to stabilize. Despite the violent downturn, some believe the bullish sentiment of "Uptober" remains intact, supported by on-chain data showing large holders, or "whales," accumulating assets during the dip.