Cryptocurrency exchange Binance has addressed user concerns following a widespread incident where several altcoins appeared to have plummeted to $0 during last Friday’s market downturn. The exchange confirmed that the apparent zero valuations were the result of a display issue rather than genuine price collapses.
Among the tokens seemingly crashing to zero on Binance were IoTeX (IOTX), Cosmos (ATOM), and Enjin (ENJ). These tokens maintained stable values on other major cryptocurrency platforms, which prompted confusion and alarm among traders using Binance.
On Sunday, Binance released a statement explaining the issue. A key factor involved certain trading pairs, including IOTX/USDT, which recently reduced the allowed number of decimal places for pricing. This modification caused prices to incorrectly display as zero on Binance’s user interface, although the actual trading prices did not fall to zero.
Binance explained: “Certain trading pairs recently reduced the number of decimal places allowed for minimum price movement, causing the displayed prices in the user interface to be zero, which is a display issue and not due to an actual $0 price.”
The incident coincided with a historic market crash that led to approximately $20 billion in liquidations of leveraged crypto positions — the largest 24-hour liquidation event on record. Binance’s platform became a focal point for these developments, sparking discussions about the stability and security of centralized exchanges during volatile periods.
Separate from the display glitch, Binance faced issues related to the depegging of Ethena’s USDe synthetic dollar, which temporarily fell to around $0.65 on the platform. Crypto trader ElonTrades analyzed the situation, attributing the depegging to Binance’s use of internal order book data, rather than external oracles, for pricing within its “Unified Account” feature.
Binance had indicated plans to switch to external oracle price feeds by mid-October. This transition window may have contributed to the vulnerability that allowed the synthetic dollar to lose its peg, triggering a liquidity cascade of up to $1 billion in liquidations on the exchange that then rippled throughout the wider market.
In response to the losses incurred, Binance has committed to compensating users affected by the price irregularities and liquidations, with a total recovery fund of $283 million announced so far.
Meanwhile, the market turmoil has sparked renewed calls from industry leaders, including Crypto.com CEO Kris Marszalek, urging regulatory bodies to investigate the risk management and operational resilience of centralized cryptocurrency exchanges, especially those impacted by significant losses during the recent crash.
The sequence of events highlights the critical role of reliable pricing data and transparent platform mechanisms in maintaining market trust, particularly during periods of intense volatility.
