Crypto.com CEO Kris Marszalek is demanding regulators step in after an unprecedented $20 billion crypto liquidation event shook the market, wiping out leveraged traders and igniting concerns over potential exchange misconduct. The CEO questioned whether some platforms manipulated prices or froze trading during the chaos, calling the scale of losses “unlike anything seen since FTX.”
Marszalek Demands Accountability
In a post on X, Marszalek urged regulators to “conduct a thorough review of fairness of practices,” emphasizing that several exchanges appeared to falter under market pressure. He questioned whether they slowed trade execution, mispriced assets, or failed to uphold anti-manipulation standards.
“Regulators should look into exchanges that had the most liquidations in the last 24 hours,” he wrote. “Did any of them halt trading or misalign prices with the global index? Transparency is needed now more than ever.” His remarks quickly gained traction among traders demanding answers after a day of record-breaking losses.
Hyperliquid Tops Liquidation Charts
According to CoinGlass data, decentralized exchange Hyperliquid bore the brunt of the sell-off, with $10.31 billion in liquidations. Bybit followed with $4.65 billion, while Binance saw $2.41 billion wiped out. Other platforms such as OKX, HTX, and Gate.io experienced smaller but still notable totals.
The nearly $20 billion liquidation figure dwarfed previous crashes, including the FTX meltdown and the COVID-19 market panic combined. Analysts described the event as a “capitulation cascade,” fueled by excessive leverage and algorithmic triggers that deepened the decline.
Binance Faces User Backlash
Binance later confirmed that a technical depeg involving Ethena’s USDe, BNSOL, and WBETH tokens caused forced liquidations for some traders. The exchange stated it was reviewing impacted accounts and “considering compensation” for cases where internal errors played a role.
Users flooded social media alleging malfunctioning trading engines. One trader claimed Binance closed their short position while leaving their long open, leading to a total loss. Binance co-founder Yi He acknowledged the issue, saying verified cases of exchange-side errors would be reimbursed — but stressed that “losses from normal market volatility will not qualify.”
A Historic Wipeout
Market analysts noted that the event eclipsed all previous liquidation records. Crypto researcher Quinten François highlighted that the $19.31 billion wiped out is more than ten times the losses seen during the FTX collapse ($1.6B) and the 2020 COVID-19 crash ($1.2B).
“The scale of this drawdown is extraordinary,” one trader commented. “It’s not just leverage unwinding — it’s a structural failure across exchanges, systems, and liquidity providers.” Many in the industry are now calling for stronger risk controls and uniform circuit breakers to prevent similar meltdowns.
Tariff Shock Behind the Market Rout
The wipeout followed U.S. President Donald Trump’s surprise announcement of 100% tariffs on Chinese imports, set to begin November 1. The move came in response to China’s new export restrictions on rare earth minerals — key components in chips and advanced electronics.
Beijing’s policy, which requires export licenses for any product containing more than 0.1% Chinese rare earths, triggered global market jitters. Trump condemned the measure as “a moral disgrace,” warning that further restrictions could harm American industry and signal a deepening trade war.
Fear Returns to Crypto Markets
The tariff news, coupled with extreme leverage, created a perfect storm for crypto traders. Bitcoin plunged to new local lows near $102,000 before rebounding slightly, while Ethereum and Solana both dropped double digits.
The total crypto market capitalization fell over 11% in 24 hours, sinking below $3.6 trillion. Despite the chaos, Marszalek’s remarks echoed across the industry — a call for transparency and fairness that may force regulators to scrutinize how crypto exchanges handle periods of high volatility.