October 10 was no ordinary day in crypto. Yes, Donald Trump “retaliated” after China announced new plans to curb rare earth metal exports. Truth Social, X, that’s classic Trump. The president will not hesitate to show how powerful the United States is.
The truth of the matter is: news of new tariffs on China was not expected to force a mega reduction on that Friday afternoon. A -10% drop in Bitcoin would be extreme. However, things quickly went wrong that October 10, and after what could be a comparatively “small” trigger, the world’s most valuable currency plummeted from over $120,000 to under $105,000 in 15 short minutes.
According to Coinglass, more than $16 billion in leveraged long and short positions were liquidated on October 10. The magnitude of this liquidation makes October 10 the largest single-day liquidation event in history; a true black swan crypto event.
(Fountain: glass coin)
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What happened? Why did cryptocurrencies fail? Tampering or system failure?
On the surface, it’s easy to blame Trump.
However, digging deeper, Trump had nothing to do with the “other” drop outside of a mild correction that would normally see BTC USD and some of the best cryptocurrencies to buy drop -10% max.
There have been theories. Some blame Binance, the world’s largest cryptocurrency exchange, and others think this was nothing more than insider trading.
For those who believe the liquidation was due to internal activity, they cite the huge shorts in Bitcoin and Ethereum placed less than an hour on Hyperliquid before the drop.
As 99Bitcoins reported, the trader, allegedly linked to the Trump family, denied all associations and said the funds belong to customers.
Others, however, place the blame squarely on Binance. In his view, the exchange exacerbated the decline by allegedly withdrawing liquidity and (un)intentionally amplifying volatility on what is typically a lean Friday afternoon, when traders are preparing for the weekend.
Whether it was a systemic failure or not, traders and market makers, including Wintermute, were left bankrupt.
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Withdraw your funds from Binance.— curb.sol (@CryptoCurb) October 14, 2025
An anonymous whale on Binance lost over $450 million when his long position in BTC USDT was closed. Wintermute lost more than $300 million. Another Chinese hedge fund lost more than $180 million. The list goes on and on.
A market maker friend speaks: what exactly happened on the night of October 11 on Binance | Let the data and facts speak
I used to do spot futures arbitrage and have quite a few market maker friends. Many of them knew, directly or indirectly, that I suffered great losses. Ironically,… pic.twitter.com/gUbH4LFaO9— 812.eth
(@GammaPure) October 20, 2025
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Lawsuits looming: Wintermute CEO
To calm traders and hedge funds, Binance handed out freebies, airdropping BNB to meme coin traders on the Binance Smart Chain.
However, this is not enough. Experts now expect a new wave of class action lawsuits targeting market manipulators, exchanges, and even liquidity providers.
On
PSA to my friends:
If you suffered material losses on CEX during the sudden crisis on October 10 and would like advice on how to proceed with this, please feel free to text me.
He has gained significant experience in high-stakes commercial litigation and can therefore offer an informed view in this regard.
– Arturo (@Arthur_0x) October 19, 2025
Binance would likely become a target for potential litigation.
In a recent podcast, Evgeny Gaevoy, CEO of Wintermute, said that they are already evaluating their legal options and would sue Binance due to the malfunctioning of their automatic deleveraging (ADL) systems. Gaevoy said his ADLs were executed at completely ridiculous prices.
Wintermute CEO @EvgenyGaevoy about how they earned ADL on Binance and predicts demands and challenges of trading companies. pic.twitter.com/d2hGXoOOHc
— cryptotesters (@cryptotesters) October 20, 2025
Typically, centralized exchanges would position ADL during periods of extreme volatility to manage risks. While it is a “last resort,” Gaevoy said Wintermute had to absorb positions at ridiculous and unreasonable prices that did not reflect market reality.
He notices a notification where a short position was closed at 5 times the actual market price, causing what he claims was an instant, unhedged loss.
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Wintermute CEO: Wave of Lawsuits After Oct. 10 Crypto Flash Crash
- Cryptocurrencies crashed on October 10, wiping out more than $16 billion in leveraged positions
- Donald Trump triggered the liquidation
- Big whales lost hundreds of millions
- Wintermute CEO Now Says Exchanges Should Expect Wave of Lawsuits
The post After the Oct. 10 Crypto Flash Crash, Expect a Wave of Lawsuits: Wintermute CEO appeared first on 99Bitcoins.
