In a recent statement, Kris Marszalek, CEO of Crypto.com, has called for a regulatory investigation into cryptocurrency exchanges that faced significant financial losses during a sudden market downturn. This demand follows an unprecedented wave of liquidations that reportedly saw nearly $20 billion wiped out in just 24 hours.
In a post on X, Marszalek urged regulators to conduct a meticulous review of the practices employed by trading platforms during this volatile period. He raised critical questions regarding whether exchanges manipulated trading conditions, such as slowing down operations or mispricing assets, which may have hindered traders’ ability to execute timely transactions. “Regulators should look into the exchanges that had most liquidations in the last 24 hours,” he said, pressing for accountability in an environment where fairness and compliance are essential.
Data from CoinGlass indicated that Hyperliquid was the hardest hit, leading the liquidation tally with over $10 billion in wiped-out positions. Bybit followed with approximately $4.65 billion, while Binance recorded about $2.41 billion in losses. Other platforms, including OKX, HTX, and Gate, experienced smaller liquidation figures, amounting to $1.21 billion, $362.5 million, and $264.5 million, respectively.
Amid this upheaval, Binance confirmed that incidents involving specific tokens—including Ethena’s USDe (USDE)—were responsible for forced liquidations among users. The exchange acknowledged the impact of a price depeg and announced that it is reviewing affected accounts to determine appropriate compensation measures. Complaints from users have emerged, with one trader claiming that Binance closed their short position entirely while leaving their long open, resulting in significant losses. This incident sparked further frustration, as the user asserted that these issues did not stem from any auto-deleveraging processes, unlike similar trades on other exchanges.
Yi He, co-founder of Binance, addressed these user grievances in a public apology, attributing the turmoil to “significant market fluctuations” and an influx of new users. She noted that while Binance is open to compensating users for losses caused by platform errors, losses attributable to market volatility or unrealized profits would not qualify for compensation.
Crypto analyst Quinten François highlighted that the recent market disruption eclipses all previous downturns, with the $19.31 billion in liquidations dwarfing losses seen during notable events such as the COVID-19 crash and the FTX collapse.
The turmoil in the cryptocurrency market was further compounded by external economic factors, particularly the announcement by US President Donald Trump regarding plans to impose 100% tariffs on all Chinese imports starting November 1. This decision, in response to China’s recent export controls on rare earth minerals, has sent ripples of concern throughout the financial landscape, contributing to the volatility experienced across trading platforms. The new Chinese regulations, which mandate that any product containing more than 0.1% of rare earths may require an export license, are set to take effect on December 1, prompting fears of economic repercussions.
As the situation unfolds, the call for regulatory scrutiny may signal a pivotal moment for the cryptocurrency industry, as stakeholders seek clarity and fairness in the wake of substantial losses and market instability.
