Binance Offers $400mn for Post-Crash “Rebuild” But Won’t Accept Liability for Losses

In addition, Binance announced yesterday that it will provide a broader $400mn industry relief plan to assist users severely impacted by the downturn. 

In a statement released Sunday, Binance said the 10 Oct crash was triggered by concentrated selling amid global macroeconomic stress. According to the company, its spot and futures engines, as well as API systems, “remained fully operational” throughout the sell-off.

Still, a mix of thin liquidity, legacy limit orders dating back to 2019, and user interface errors caused temporary price anomalies on several trading pairs, including IOTX/USDT and ATOM/USDT. The exchange said an internal display glitch stemming from recent tick-size adjustments made some prices show as zero, although trade execution data remained correct.

Collateral assets such as USDe, BNSOL, and WBETH briefly lost their pegs during the event, liquidating some margin positions. Binance said it distributed compensation within 24 hours across two batches, fully covering user losses linked to the de-pegging.

Restoration

The firm on Tuesday also launched a compensation program it dubbed the “Together Initiative,” allocating $300mn in USDC for retail users who experienced forced liquidations. The company will provide an additional $100mn in low-interest loans to help institutional clients restore trading capacity. 

“We are doing this because we believe it is critical to rebuild industry confidence. Ultimately, Binance chose to invest these resources where they are most needed: with our users,” Binance said in a statement. However, the company maintains it is not accepting legal liability for losses. 

Nonetheless, last week’s downturn shows that even mature exchanges can face operational challenges during abrupt market movements.