The sudden downturn that rocked the crypto market this week may have been the result of a coordinated attack targeting Binance, according to Conflux (CFX) Network executive Forgiven.
In a post shared on X, the executive claimed that the incident exposed structural flaws that allowed cascading liquidations between major trading pairs.
Those responsible for the 1011 crash speculated that this was a planned attack on BN and the major BN market makers, and that the Achilles heel was an issue with Binance's unified account contract margin.
In addition to the usual U standard and currency-based margins, BN also opens up the option of unified margins for POS derivatives and treasury management stable coins. The three margin tokens most severely attacked this time are USDE, Wbeth, and BnSol. … pic.twitter.com/fWLXqqQLQO
— Forgiven (@forgivenever) October 11, 2025
Related: Coinglass accuses Binance of underreporting liquidations during Trump-induced crypto crash
How the exploit affected Binance’s margin system
Forgiven explained that Binance's architecture allows traders to use all their collateral, from USD and coin margin contracts to staking derivatives and tokens linked to stablecoins, in one comprehensive account.
That flexibility turned into risk when the market fluctuated wildly. USDe, BNSOL, and WBETH lost their pegs, causing collateral values to collapse and triggering liquidations across retail and institutional positions.
Depegs trigger chain liquidation
USDe fell to $0.65 on the exchange, compared to $0.90 on other exchanges, according to Binance data. WBETH fell to $0.20, BNSOL crashed to $0.13, and leveraged accounts were wiped out.
Losses quickly multiplied because the value of the margin was tied to live spot prices rather than a fixed reference value.
Forgiven noted that several altcoins have plummeted on Binance alone, a sign that the hedged portfolios of major market makers have been wiped out.
Loss estimation and structural vulnerability
The trading volume of USDe, WBETH, and BNSOL reached $3.5 billion to $4 billion within 24 hours.
Forgiven estimated the resulting change in earnings to be between $5.0 billion and $1.0 billion. If Binance compensates users, the total amount could fall within that range.
The crash coincided with the exchange's 12% USDe asset management program, which allows users to loop loans through lending products, increasing exposure as collateral prices fall.
Demand stronger risk management
Conflux executives said the event showed how financial innovation can outperform risk safeguards.
He called on Binance and other exchanges to restructure their clearing logic and strengthen margin collateral checks before a similar shock hits the market again.
“An integrated system is efficient until volatility becomes a contagion channel,” he warned.
Related: President Trump intensifies tariff war with China, causing haemorrhage in virtual currency market
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