In a significant move amid recent turmoil in the cryptocurrency market, Kris Marszalek, CEO of Crypto.com, has called for a regulatory investigation into exchanges that experienced the largest losses during a dramatic 24-hour period that saw around $20 billion wiped out in liquidations. In a post shared on X, Marszalek urged regulatory bodies to conduct a comprehensive review of practices in the cryptocurrency trading sector, questioning whether exchanges adequately maintained their anti-manipulation measures during this downturn.
Marszalek’s concerns highlight the pressing need for accountability among trading platforms. He explicitly asked if any exchanges had halted trading or mispriced assets, thereby potentially exacerbating users’ losses. “Regulators should look into the exchanges that had most liquidations in the last 24 hours,” he stated. His comments come in the wake of a massive sell-off, with data from CoinGlass indicating that Hyperliquid led all exchanges in liquidations, suffering over $10 billion in wiped-out positions. Bybit and Binance followed, with losses of approximately $4.65 billion and $2.41 billion, respectively. Other exchanges such as OKX, HTX, and Gate recorded smaller but still substantial liquidations.
Adding to the distress of users, Binance confirmed an incident of price depeg, wherein the assets Ethena’s USDe (USDE), BNSOL, and WBETH triggered forced liquidations for some users. The platform has announced that it is reviewing the affected accounts and considering appropriate compensation measures. Reports surfaced from users claiming that the exchange erroneously closed their short positions while leaving their long positions open, resulting in significant financial losses. Binance co-founder Yi He publicly acknowledged these user grievances, attributing the issues to significant market fluctuations and a surge of users on the platform. She mentioned that Binance would compensate verified cases caused by platform errors while clarifying that losses due to regular market volatility would not be subject to compensation.
Market analysts, including Quinten François, have noted that the recent liquidations eclipsed previous downturns, with the $19.31 billion lost exceeding losses from notable prior events, such as the COVID-19 crash and the FTX collapse.
The backdrop of this market meltdown includes geopolitical tension, as U.S. President Donald Trump announced plans to impose 100% tariffs on all Chinese imports, set to take effect on November 1, in response to China’s recent export restrictions on rare earth minerals. Given that China provides approximately 70% of the world’s rare earth minerals, this move raised significant concerns about the potential for escalating trade tensions. Trump’s criticism of China’s policy as a “moral disgrace” signals a stark shift in diplomatic relations and has implications for global markets, threatening to affect more than just cryptocurrencies.
Overall, the requests by Marszalek and the unfolding events underline ongoing vulnerabilities in the cryptocurrency marketplace and the critical need for enhanced regulatory framework to protect users and ensure the integrity of trading platforms.
