Crypto.com CEO Calls for Probe After $20B Crypto Liquidation

The crypto market experienced one of its largest sell-offs in history, wiping out over $20 billion in trading positions in just 24 hours. In response to the unprecedented turmoil, Crypto.com CEO Kris Marszalek has called for regulators to investigate whether exchanges handled the crash fairly and maintained proper controls.

Industry Leader Urges Scrutiny of Exchange Practices

In a recent post shared on X, Marszalek highlighted concerns about the fairness of trading platforms during the recent market turmoil. He asked regulators to examine whether exchanges slowed trading, mispriced assets, or failed to maintain anti-manipulation and compliance measures.

Data from CoinGlass shows that Hyperliquid, the decentralized exchange dominating the derivative market, suffered the heaviest losses. The platform recorded $10.31 billion in wiped-out positions. Bybit followed with $4.65 billion, and Binance reported $2.41 billion. Other major exchanges, including OKX, HTX, and Gate, saw smaller totals of $1.21 billion, $362.5 million, and $264.5 million, respectively.

Binance confirmed that a price depeg involving Ethena’s USDe, BNSOL, and WBETH contributed to forced liquidations for some users. According to crypto analyst Quinten François, the $19.31 billion wiped out during this market meltdown far surpasses previous downturns. For comparison, the COVID-19 crypto crash saw $1.2 billion in liquidations, while the FTX collapse caused $1.6 billion in losses.

Binance Addresses User Loss Complaints After Market Turmoil

Several users reported losses due to platform errors rather than market movements. One Binance trader claimed that the exchange fully closed their short position while leaving their long open, causing a total loss. The trader noted that similar trades on other platforms survived the crash.

Binance co-founder Yi He publicly acknowledged the complaints. She cited significant market fluctuations and a substantial influx of users. The platform said it is reviewing affected accounts and plans to implement appropriate compensation measures. 

She confirmed that verified cases caused by platform errors would receive compensation. However, losses resulting from normal market fluctuations or unrealized profits would not be eligible. 

Geopolitical Factors Fueling Market Volatility

The recent market meltdown coincided with trade tensions between the U.S. and China once again. US President Donald Trump announced plans to impose 100% tariffs on all Chinese imports starting Nov. 1. 

This is in response to China’s new export restrictions on rare earth minerals. Trump criticized Beijing’s policy as a moral disgrace. He also hinted at canceling a planned meeting with President Xi Jinping at the upcoming APEC summit.

China, which supplies about 70% of the world’s rare earth minerals, announced that any product containing over 0.1% Chinese rare earths will now need an export license. The new rule is scheduled to take effect on December 1.