For context, during the October 10 event, roughly $19 billion in leveraged positions were liquidated, with $3.21 billion erased in a single minute. Around 1.6 million traders were forced out of their positions as Bitcoin plunged from about $122,000 to $104,000.
However, he argued that the broader story surrounding the October 10 collapse warrants serious attention regardless of whether a formal investigation is underway.
Since the crash, a series of developments has kept Binance under scrutiny. Shortly after the event in October 2025, the exchange attributed the turmoil to a broader macroeconomic shock and denied responsibility, later paying about $283 million in compensation.
In January 2026, Ark Invest CEO Cathie Wood stated during an appearance on Fox Business that a “Binance software glitch” was responsible for triggering the crash.
Later that month, OKX CEO Star Xu publicly accused Binance of engaging in “irresponsible marketing campaigns,” further escalating tensions between major exchanges.
In early February, Binance reportedly sent cease‑and‑desist letters to X users who were speculating about the exchange’s solvency. Now, fresh rumors suggesting potential SEC involvement have added a new layer of uncertainty, even though no official confirmation has been made.
Binance Denies ResponsibilityRegardless of whether the SEC is actively investigating, some former regulators argue that the October 10 crash itself demands a thorough review.
Salman Banaei, a former official at the Commodity Futures Trading Commission (CFTC), has compared the incident to the 2010 Flash Crash in traditional markets, saying it merits a similarly rigorous investigation.
Zhao addressed claims that technical issues and pricing discrepancies on Binance triggered the record‑breaking liquidations. He emphasized that, following the crash, the platform offered approximately $600 million in compensation to affected users and businesses.
Featured image from OpenArt, chart from TradingView.com
