Original Title: Was the Friday Crash a Coordinated Attack? The Evidence Points to Something Disturbing
Original Author: @yq_acc
Original Translation: Jiahua, ChainCatcher
The black swan event from October 10 to 11 led to the largest liquidation in crypto history, amounting to $19.3 billion. Although initial reports attributed the cause to market panic triggered by tariff announcements, a deeper analysis of the data revealed some troubling questions. Was this a coordinated attack against Binance and USDe holders? Let’s examine the evidence.
Doubt 1: Why These Three Assets?
The most perplexing aspect of this crash centered on three specific assets — their prices collapsed catastrophically, but only on Binance:
- USDe: Plummeted to $0.6567 on Binance, while maintaining above $0.90 on other exchanges.
- wBETH: Crashed to $430 on Binance, 88.7% lower than the normal price of ETH.
- BNSOL: Dropped to $34.9 on Binance, with almost no fluctuations on other exchanges.
This phenomenon of a “specific exchange” crash immediately raised alarms. Market panic typically does not affect a single platform so precisely.
Doubt 2: Coincidental to Suspicious Timing
The situation became even more interesting. As early as October 6, Binance announced it would update the pricing mechanism for WBETH and BNSOL, expected to take effect on October 14 (now changed to October 11). The crash occurred precisely during the “window of vulnerability” between the announcement on October 10 and the new mechanism taking effect.
Out of thousands of trading pairs, why did only these three, which were announced for updates, experience extreme decoupling? The probability of this being mere coincidence is negligible.
Attack Hypothesis Derivation: A Carefully Planned Timeline
Assuming this was indeed an organized attack, the timeline shows meticulous planning:
5:00 AM (UTC+8): The market began to decline due to tariff news, a normal reaction.
5:20 AM: The liquidation of altcoins suddenly accelerated. This step may have been aimed at specifically targeting the positions of market makers.
5:43 AM: USDe, WBETH, and BNSOL began to crash simultaneously on Binance.
6:30 AM: The market structure completely collapsed.
Specific Details of the Crash:
5:00 AM (UTC+8): Initial market volatility begins
Bitcoin starts to drop from $119,000
Trading volume remains within normal range
Market makers maintain standard spreads
5:20 AM: First wave of liquidation waterfall
Altcoin liquidations accelerate sharply
Trading volume surges: 10 times normal trading activity
Market maker withdrawal patterns emerge
5:43 AM: Key decoupling event
USDe: $1.00 → $0.6567 (-34.33%)
WBETH: 3,813 USDT → begins catastrophic decline
BNSOL: ~200 USDT → accelerates collapse
5:50 AM: Maximum dislocation
WBETH reaches 430.65 USDT (down -88.7% from parity)
BNSOL bottoms at 34.9 USDT (-82.5%)
Buyer liquidity completely disappears
6:30 AM: Market structure completely collapses
Total liquidation exceeds $10 billion
Market makers completely withdraw
Binance-specific price anomalies peak
USDE/USDT drops at 5:43 AM (Singapore time)
WBETH/USDT drops at 5:43 AM (Singapore time)
The first wave of liquidation and the crash of USDe, WBETH, and BNSOL had a 23-minute interval, indicating a sequential execution rather than a random panic event.
BNSOL/USDT drops at 5:43 AM (Singapore time)
USDe Factors
USDe itself has several weaknesses that make it an ideal target for attack:
Hidden leverage: Binance's 12% yield program encourages users to engage in recursive borrowing, creating leveraged positions of up to 10 times.
Concentrated collateral: Many traders use USDe as margin collateral.
Weak liquidity: Despite being called a “stablecoin,” USDe's order book depth is surprisingly shallow.
When USDe crashed to $0.6567, it not only caused direct losses but may have triggered a chain reaction throughout the ecosystem.
Market Maker Perspective
A theory circulating among traders is that the first wave of altcoin liquidation at 5:20 was specifically aimed at targeting market makers. Once market makers were forced to exit due to losses, they would simultaneously withdraw all orders across trading pairs, causing the market to instantly lose liquidity and become vulnerable.
Evidence shows that many altcoin prices on Binance were far lower than on other exchanges at that time, consistent with the pattern of major market makers being liquidated.
Tracking Funds
If this was an organized attack, the attackers made astonishing profits:
Potential short profits: $300 million - $400 million
Opportunities to accumulate at low prices: $400 million - $600 million
Cross-exchange arbitrage: $100 million - $200 million
Total profit potential: $800 million to $1.2 billion
This is not normal trading profit but rather a robbery-like return.
Other Explanations
To be fair, there are other possibilities:
Chain liquidation effect: A large liquidation naturally triggers a snowball effect.
Risk concentration: Too many traders adopted similar strategies.
System pressure: The exchange's system fails under extreme trading volumes.
Panic psychology: Fear itself creates a self-fulfilling prophecy.
However, these explanations struggle to account for why the crash so precisely targeted specific assets and a specific exchange.
Suspicious Aspects of the Event
Several factors distinguish this event from a typical market crash:
- Venue specificity: Price crashes were almost entirely confined to Binance
- Asset selectivity: Only assets with pre-announced vulnerabilities were severely affected
- Timing precision: Occurred within the exact window of vulnerability
- Sequentiality: Market makers were cleared before the main targets were hit
- Profit pattern: Consistent with a pre-deployed strategy
What It Means If True
If this was indeed a coordinated attack, it represents a new evolution in crypto market manipulation. Attackers are no longer targeting systems or stealing keys but weaponizing the market structure itself.
This would mean:
- Every exchange announcement becomes a potential vulnerability
- Transparency may paradoxically reduce security
- Market structure needs fundamental redesign
- Current risk models are inadequate
Some Disturbing Possibilities
While we cannot definitively prove the existence of an organized attack, the evidence constitutes reasonable suspicion. Its precision, timing, venue specificity, and profit pattern perfectly align with the characteristics of a coordinated attack.
Whether through exceptional speculation or deliberate planning, someone has turned Binance's transparency into a vulnerability, seizing nearly a billion dollars in the process.
The crypto industry must now grapple with a disturbing question: In our interconnected, 24/7 operating market, has transparency itself become a weapon that cunning participants can wield?
Until we have clear answers, traders should assume that all exchanges have similar vulnerabilities. The events of October 10 to 11 may have many explanations, but one thing is certain: it was not random.
This analysis is based on existing market data, cross-exchange price comparisons, and established market behavior patterns. The views expressed represent my personal opinion and reference but do not represent any institutional stance.
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