When the crypto markets started unraveling in October, the carnage was swift and brutal. Prices collapsed, automated liquidations multiplied, and across the industry, alarm bells rang.
But as the dust settles, one narrative is intensifying: that the flash crash was not merely a macro shock but also an exchange-level failure with deep implications for pricing integrity and investor protection.
Flash Crash by the Numbers: How Big Was It?
In the span of just 24 hours, total forced liquidations in the crypto markets reached an estimated $19–20 billion, dwarfing previous dislocations such as the FTX collapse or the COVID-19 drawdown.
Data aggregators ranked Hyperliquid, Bybit, and Binance among the top exchanges by liquidation volume, with Binance responsible for more than $2.4 billion in closed positions. Many market participants contend these public numbers substantially understate total losses, especially when factoring in cross-platform funding and off-exchange exposure.
The shockwave of the crash also exposed cracks in order-routing, API throttling under load, frozen user interfaces, and failed stop-loss executions. Some Binance users reported account freezes and an inability to act during critical moments.
JUST IN: @cryptocom CEO IS CALLING ON REGULATORS TO INVESTIGATE @binance FOLLOWING $400B IN LIQUIDATIONS FLASH CRASH CAUSED BY BINANCE’S FAULTY INTERNAL PRICE ORACLES
GET YOUR FUNDS OFF BINANCE IMMEDIATELY pic.twitter.com/y1jGiRG8T8
— curb.sol (@CryptoCurb) October 15, 2025
Binance’s Internal Oracle System Under Fire
Central to the controversy is the allegation that Binance relied excessively on internal order-book snapshots (or “internal oracles”) to set reference prices in its liquidation engine — rather than robust cross-venue feeds or decentralized oracle data.
In particular, three collateral assets—USDE, wBETH, and BnSOL—allegedly depegged sharply on Binance (to levels like $0.65, $0.20, and $0.13, respectively), triggering mass liquidations.
On other platforms or on-chain oracle systems, those assets remained much closer to expected peg levels, suggesting that the dislocation was mostly internal to Binance’s pricing system.
Critics argue that Binance’s Unified Account margin model, which permitted yield-bearing tokens and unstable stablecoins as collateral, magnified vulnerability. Because liquidation pricing used internal metrics, the system became exploitable once stress began.
Some analysts view the timing of the crash — between an announced Oracle update (October 6) and its deployment (scheduled October 14) — as suspicious, giving bad actors a window to prepare.
Binance has since acknowledged token depeg events and pledged to review impacted accounts. Co-founder Yi He apologized to users, stating that losses from “market fluctuations” are not eligible for compensation, but promising redress in cases of “platform errors.”
Crypto.com CEO’s Call for Regulatory Scrutiny
In a high-profile move, Crypto.com CEO Kris Marszalek publicly urged regulators to launch investigations into exchanges that experienced the heaviest liquidations. He questioned whether platforms had slowed or halted trading, mispriced assets, or failed in trade monitoring and anti-manipulation safeguards.
Marszalek’s post — amplified by community observers — cited specific exchanges that appeared most exposed and implicitly questioned how much of the crash was endogenous rather than external.
These remarks echo broader industry concerns about exchange accountability, transparency, and investor protection during high-stress events.
What This Means for XRP Holders
For holders of XRP, the episode underscores a critical truth: custody and execution infrastructure matter as much as token fundamentals. Even if XRP maintains its rails, being caught on a platform with flawed internal pricing logic or weak risk controls could lead to amplified losses.
Curb post (from which much of this analysis originated) sounded a fire alarm for XRP holders to reassess platform exposure and consider custody alternatives. Particularly, traders should be vigilant about how exchanges price stop-loss orders, how oracles are integrated, and how exchanges handle collateral depeg events under duress.
Looking Ahead: Oversight, Reform, and Risk Mitigation
The flash crash may prove a turning point in how markets view exchange infrastructure. Possible pathways forward include regulatory audits of pricing and liquidation engines, mandates for external oracle integration, enhanced stress-testing protocols, and clearer disclosure obligations.
While Binance has promised internal reviews and compensation for “platform fault” cases, many observers argue that only systematic reform and independent oversight can restore confidence.
In sum, the October crash was more than a macro sell-off. It exposed a fault line between token resilience and exchange mechanics. For XRP holders — and all participants in leveraged crypto markets — infrastructure risk is now inseparable from market risk.
Disclaimer: This content is meant to inform and should not be considered financial advice. The views expressed in this article may include the author’s personal opinions and do not represent the opinion of the publication. Readers are urged to do in-depth research before making any investment decisions. Any action taken by the reader is strictly at their own risk.