Market News

SEC Probes US Crypto Giant Binance Amid October Liquidation Controversy

Recent rumors have surfaced regarding a potential investigation by the US Securities and Exchange Commission (SEC) into Binance, centered on the massive liquidation event that occurred on October 10, 2025.

This incident, recognized as the largest market wipeout in cryptocurrency history, saw approximately $19 billion in leveraged positions liquidated in a matter of minutes, with Bitcoin's price plummeting from around $122,000 to $104,000.

Market expert Hugo Crypto reignited discussions about Binance’s potential involvement, although he stated the SEC inquiry remains unconfirmed and merely speculative at this point.

The aftermath of the October crash has kept Binance under intense scrutiny, especially since the exchange attributed the events to broader macroeconomic factors rather than its own actions, compensating $283 million to affected traders.

Cathie Wood, CEO of Ark Invest, suggested in early 2026 that a 'Binance software glitch' might have caused the catastrophic drop, further complicating the narrative around the exchange.

Consequently, OKX's CEO Star Xu accused Binance of resorting to irresponsible marketing tactics, signaling heightened competition among major exchanges.

Moreover, Binance responded to rumors regarding its solvency with cease-and-desist letters to users speculating on social media, indicating their concern over reputational damage.

A former CFTC official, Salman Banaei, argued that the October 10 event warrants a comprehensive examination similar to that of the 2010 Flash Crash in traditional markets, regardless of formal SEC involvement.

In response to allegations of causing the crash, Binance leadership, including former CEO Changpeng Zhao, has firmly denied blame, asserting that hefty compensation was provided to users affected by the liquidations.

As speculation continues, the intersection of regulatory scrutiny and operational allegations presents a complex challenge for Binance and the broader cryptocurrency landscape.