What Cathie Wood Said
ARK Invest’s CEO’s viewpoint
Cathie Wood (ARK Invest CEO) publicly stated that the October 10, 2025 flash crash was tied to a Binance “software glitch” that triggered widespread forced liquidations across the crypto market.
According to Wood’s comments:
Bitcoin fell sharply during the event — about from ~$122,000 down to ~$105,000 — as leveraged positions were liquidated.
She attributes a record ~$28 billion in forced deleveraging to market participants being pushed out of positions.
Wood described the crash as more than a simple panic sell-off, framing the Binance tech issue as a systemic shock rather than normal volatility.
She has said the ensuing deleveraging may continue affecting price basing near $80,000 – $90,000 before recovery.
Note: Multiple industry figures (including OKX’s Star Xu) have echoed criticism of Binance’s infrastructure and market impact during the event.
🧨 2. What Actually Happened on October 10–11, 2025
The Market Crash
The crypto market experienced massive volatility on October 10–11, 2025, during which:
More than ~$19 billion in leveraged positions were liquidated industry-wide — one of the largest single-day events in history.
Bitcoin and other major assets plunged sharply amid macro shocks, particularly global sell-offs triggered by U.S.–China tariff fears that hit risk assets.
Binance-Specific Issues
Traders reported technical disruptions on Binance, including:
Temporary price mis-quotes for assets such as USDe, wBETH, and BNSOL, where some tokens briefly traded far from prices on other venues.
Brief de-pegging and pricing anomalies on stablecoin pairs that destabilized collateral valuations for margin traders.
However, most independent reports and Binance’s own review did not find a platform-wide outage or fundamental system failure — the core matching engine and risk systems continued operating normally.
🛡️ 3. Binance’s Response & Compensation
Company’s Official Position
Binance publicly rejected claims that a glitch caused the crash and emphasized that:
Core systems remained operational throughout the market turmoil — there was no exchange-wide outage or downtime.
The flash crash was primarily driven by macro factors, high leverage, and market liquidity drying up, not by Binance engineering a collapse.
Compensation and Relief
Binance acknowledged some technical issues amid extreme volatility and has taken extensive measures to support users:
Initial compensation of roughly $283 million distributed soon after the crash.
A broader $400 million relief initiative (the “Together Initiative”), including vouchers and low-interest loans for affected traders.
Combined, user support commitments exceeded $600 million through these programs.
🧑💼 4. Changpeng Zhao (CZ)’s Counterclaim
Binance co-founder Changpeng Zhao has flatly denied that the exchange caused the market crash, describing such claims as “far-fetched” and attributing losses to broad market forces and margin unwinds.
CZ noted that technical issues that occurred were resolved and that compensation was provided where appropriate, but that it did not equate to Binance being responsible for the overall crash event.
📊 Summary of Key Data Points
Event / Claim Reported Data
Bitcoin fall ~From $122K to ~$105K during peak crash volatility
Total forced liquidations ~$28 billion (industry-wide)
Leveraged positions wiped ~$19 billion in 24-hour period
Binance compensation ~$283 m + $400 m relief initiative (total > $600 m)
Binance claim No platform-wide technical outage — core systems operational
🪙 5. Broader Market Context
The flash crash coincided with major moves in global equity markets (e.g., U.S. stocks losing roughly $1.5 trillion amid tariff fears).
High leverage and thin liquidity, combined with aggressive automated risk controls, likely amplified price moves across crypto markets.
