The October 10–11 crypto market crash, which wiped out nearly $20 billion in value within 24 hours, may not have been a random event, according to Dr. Martin Hiesboeck, head of research at Uphold. The analyst claims the collapse was “a targeted attack exploiting a flaw in Binance’s Unified Account margin system,” suggesting that internal structural weaknesses amplified what began as a macro-driven shock.
Hiesboeck explained that collateral assets such as USDe, wBETH, and BnSOL used in Binance’s margin accounts had liquidation prices based solely on Binance’s internal spot markets rather than external price feeds. When those assets depegged violently during the selloff, it triggered a cascade of forced liquidations across the exchange, a situation he described as “Luna 2.”
The crypto market crash on October 11 is suspected to be a targeted attack that exploited a flaw in Binance's Unified Account margin system.
The issue stemmed from using assets like USDE, wBETH, and BnSOL as collateral, whose liquidation prices were based on Binance's own…
— Dr Martin Hiesboeck (@MHiesboeck) October 12, 2025
Binance has since acknowledged extreme price dislocations in those same tokens and promised full compensation for affected users. In a statement published October 12–13, the exchange confirmed that all users who held the affected assets as collateral between 21:36 and 22:16 UTC will be reimbursed, including liquidation fees, with payouts calculated using pre-crash prices.
During the crash window, USDe plunged to roughly $0.65, while wrapped staking tokens wBETH and BnSOL also collapsed, erasing collateral value across Unified Accounts. Hiesboeck later clarified that the event reflected flawed leverage mechanics rather than deliberate market manipulation, citing an external shock, President Trump’s new tariff threat against China, as the initial trigger.
“Too many traders were overleveraged, and the system dumped collateral immediately at any price,” he wrote. Binance has since announced a major compensation plan and new risk control measures to prevent similar events in the future.