How the crypto market lost $20 billion as a result of liquidations. Full investigation

On October 10, the largest daily volume of liquidations in the history of the crypto market was recorded — almost $20 billion. This amount was lost by traders who had previously opened long positions. GetBlock AML Research explains what exactly happened in the market and why this crash became the largest in history.

What happened

On October 10, the price of bitcoin fell by more than 15% (to $102 000), and the price of Ethereum fell by almost 22% (to $3450). The price of altcoins collapsed by 20-70%, triggering a cascade of liquidations. According to estimates from various analytical services, the total daily volume of liquidations in the cryptocurrency market reached nearly $20 billion. The market crash occurred after US President Donald Trump announced new 100% tariffs on all Chinese goods in addition to the existing tariffs.

However, the actual volume of liquidations may be much higher, according to Hyperliquid founder Jeff Yan. He says that centralized exchanges deliberately understate the volume of liquidations by hundreds of times.

Statement by the founder of Hyperliquid

As a result of the collapse of the cryptocurrency market, Hyperliquid users lost $1,23 billion. More than 1000 wallets were completely emptied as a result of margin calls. More than 6300 wallets suffered losses, and 205 addresses lost more than $1 million.

Hyperliquid user losses in real time

Attack on Binance

At the time of writing, one of the primary reasons for the massive collapse of the crypto market is considered to be a planned attack on Binance’s liquidity and its market makers through the USDe stablecoin. Mass sales of USDe triggered a cascade of liquidations of traders on Binance, which uses stablecoins as collateral for leveraged positions. At the time of the crypto market crash, USDe lost its peg to the US dollar, with the stablecoin’s value falling to $0,65.

As a result of the USDe manipulation, Binance customers’ positions in the Earn program, which allows them to provide liquidity to the platform in exchange for passive income, were liquidated. Binance acknowledged its mistake and agreed to pay users $283 million in compensation.

Insider trading

One of Hyperliquid’s traders may have been involved in the collapse of the crypto market, opening a large short position on BTC just half an hour before Trump’s announcement. As a result, the trader managed to earn more than $200 million. Later, the true identity of the mysterious insider became known. It turned out to be the former head of the BitForex exchange, Garrett Jin. The exchange itself ceased operations in 2024 after its top managers and developers were arrested by Chinese police.

Garrett Jin, former head of the BitForex exchange