At first glance, the $19 billion liquidity wipeout on Oct. 10 looked routine: a rapid chain of liquidations, or forced closures of trading positions, across major exchanges as bitcoin BTC$77,501.57, the largest cryptocurrency, tumbled.

It's what followed, and the lack of transparency over the day's events, that's made the largest single-day liquidation by dollar value in crypto history frustrating for traders and changed crypto trading fundamentally.

And one name has everyone's attention: Binance.

The world’s largest crypto exchange has, for many, become the face of the crash, which saw bitcoin drop as much as 12.5%, the most in 14 months. That forced exchanges to close or liquidate leveraged positions that had run out of funds to remain open.

Whether because of Binance's scale, its dominance in derivatives trading or the lack of clarity about exactly what happened, on any given day, social media sports multiple accusations claiming the exchange was the biggest reason Oct. 10 (now known to many as 10/10) occurred.

Binance maintains to this day that the closures weren't the exchange's fault. The company did not respond to a CoinDesk request for comment on this article.

Still, without someone owning the narrative, it's easy to see why such an event has traders on edge.

In the months since the crash, liquidity across much of the market has remained noticeably thinner. Order books have not been fully rebuilt. Market depth (the ability to sustain relatively large market orders without significantly impacting the price) is patchier, while the spread between buyers' and sellers' pricing is wider. Many traders say the bruised market structure contributed to bitcoin’s decline from $124,800 to $80,000 and eroded traders' trust.

Now, Ark Invest CEO Cathie Wood has added her voice to the clamor, attributing bitcoin’s weakness to “a Binance software glitch.”

Why Binance is back at the center of the debate

Wood spoke on Fox Business in late January, saying the glitch triggered roughly $28 billion in deleveraging.

Binance co-founder He Yi responded online, noting that Binance does not serve U.S. individuals, though the post was later deleted.

Competitors seized the opening. Star Xu, the founder of rival exchange OXK, wrote that Oct. 10 caused “real and lasting damage to the industry.” While he didn't refer to Binance, his comments were widely interpreted as a pointed critique of his rival's role.

Meanwhile, challengers such as decentralized exchange Hyperliquid highlighted gains in derivatives volume and liquidity depth, positioning themselves as alternatives as Binance faces reputational drag.

Binance maintains that Oct. 10 was not the result of an internal systems issue.

During an ask-me-anything event on Friday, co-founder and former CEO Changpeng “CZ" Zhao said suggestions that Binance caused the crash were “far-fetched.”

The company described the event as driven by “market factors,” citing macroeconomic pressure, high leverage, illiquid conditions and congestion on the Ethereum network. Binance said its core systems remained operational and it paid roughly $283 million in compensation to affected users.

'Spitting in our faces'

For some, that explanation isn't enough, particularly given the scale of liquidations, and the $19 billion figure has taken on an outsized symbolic weight. Binance's compensation figure is frequently framed less as restitution than as a fraction of the damage.

“This is a f***ing joke,” wrote the pseudonymous Bitcoin Realist on X. “You…liquidated 19 billion on 10/10 alone… This is like spitting in our faces.”

The anger reflects something broader than a single volatility event. For many, Oct. 10 has become a proxy for distrust in crypto market structure.

Not everyone agrees Binance deserves the role of villain, however.

“10/10 was very obviously not a ‘software glitch,’” Evgeny Gaevoy, CEO of market maker Wintermute, wrote on X. “It was a flash crash on mega leveraged market on illiquid Friday night driven by macro news.”

He added: “Finding a scapegoat is comfy, but blaming this on one exchange is intellectually dishonest.”

The argument is straightforward: Crypto remains structurally leverage-heavy, and liquidity is often conditional. Market makers widen spreads or step back entirely during stress. In thin conditions, liquidations accelerate.

Binance may have been the largest venue where the crash played out, but it wasn't necessarily the source of the shock.

The transparency gap keeps speculation alive

What's missing is a public review and official narrative. Critics argue that the absence of a detailed inquiry leaves room for speculation to snowball.

Salman Banaei, a former regulator at the U.S.'s Commodity Futures Trading Commission (CFTC), suggested Oct. 10 warrants investigation, even without alleging wrongdoing.

“Whether you love or hate crypto, there should be an investigation by regulators into Oct 10, 2025,” Banaei wrote, comparing it to the May 6, 2010, stock market flash crash. “A benefit of regulation is that the risk of such investigations deters manipulation.”

He was careful to note he was not claiming manipulation occurred. But the broader point is that crypto markets lack the formal post-mortems that traditional finance relies on after systemic shocks.

One trader, known as Flood, insinuated that a major exchange had been “relentlessly selling altcoins since 10/10,” feeding conspiracy theories about inventory overhang.

Whether true or not, such claims tend to flourish when liquidity disappears and confidence erodes.

The deeper issue is market depth, not one exchange

Oct. 10 may ultimately be remembered less for the liquidation number than for what it revealed about market structure.

In a bull market, order books are thick, leverage builds quietly, and liquidity is abundant.

Bear markets expose the opposite. Liquidity thins, market makers retreat, volatility concentrates, and the next shock breaks through faster than expected.

Referring to the collapse of crypto exchange FTX in 2022, Ether.fi CEO Mike Silagadze wrote on X that “this seems so much worse than the post FTX landscape. The fundamentals in some ways are stronger than ever, but price action has zero bids.”

Binance is the easiest scapegoat because it’s the largest exchange and thus the most visible venue and obvious target.

But the deeper issue is structural. Crypto liquidity remains dependent on leverage, conditional market making and confidence, all of which have been lost in a void over the past four months.

"I don’t know if Binance played a role in deliberately ruining the market in October, I would probably veer more towards the obvious which is; high amounts of leverage, low amounts of liquidity, generally useless or unwanted altcoin “technologies” is a recipe for a massacre and thats exactly what happened," said Eric Crown, former options trader at NYSE Arca.

"It was always a question of when, not if."