Binance, the world’s largest crypto exchange, had a tough week after a flash crash on October 10 exposed flaws in its trading systems. The exchange pledged over $700M in compensation: $45M for memecoin traders, $283M for losses from de-pegging issues, and $400M to help Futures and institutional traders restart.
While Binance denied causing the crash, its massive payout sparked debate. Critic Benson Sun questioned why Binance would pay if it weren’t responsible. Binance CEO Changpeng Zhao (CZ) defended the move, citing past acts of user protection and stressing that Binance’s core value is to protect users.
Allegations arose claiming Binance charges up to $2 million in BNB security deposits for token listings, which Binance called false. Amid concerns, cautious investors withdrew $21.75 billion from centralized exchanges like Binance in the last week, signaling widespread unease.
Despite technical glitches and volatile markets causing altcoins to briefly hit zero prices on Binance, CZ reassured users that the exchange remained stable, compensating those affected by depegging. This turmoil highlights growing challenges for centralized exchanges as they face technical issues, market shocks, and increasing community scrutiny.
