In an official statement, the exchange said the claims circulating on social media were “false and misleading,” emphasizing that they originated from an independent trader unaffiliated with Binance or any official market-making partner.
Independent Trader Behind False Claims
According to Binance, the controversy stemmed from a single trader who publicly alleged that system errors on the exchange caused massive position losses during the October 11 market crash. The trader had claimed that “Reduce Only” orders on Binance returned 503 error codes for more than an hour, preventing them from closing trades.
However, the company’s investigation found that no such malfunction occurred. Binance stated that the orders in question had successfully passed through both position and price verification systems, and the exchange’s internal audit revealed no disruptions or delays during that time.
The trader’s investment firm later confirmed that the individual was not authorized to represent them publicly. The firm has since terminated its relationship with the external trading team involved, withdrawn any pending claims against Binance, and instructed the trader to remove their posts from social media.
Misunderstanding Leads to Viral Accusations
The incident quickly gained traction across crypto forums and X (formerly Twitter), with some users accusing Binance of favoring its own market makers. The rumors escalated before being walked back more than a week later, when the trader deleted their posts and acknowledged that no system faults were found after reviewing logs with both Binance and their firm.
Binance said the episode demonstrates how unverified claims can distort market sentiment during volatile periods. “The spread of inaccurate information can harm users and damage trust in the industry,” the company wrote, adding that it reserves the right to pursue legal action against individuals spreading defamatory statements.
Binance Urges Risk Awareness
In its closing remarks, Binance reminded traders that crypto markets are inherently volatile and that effective risk management remains crucial, particularly during rapid price swings.
The exchange also reiterated its commitment to transparency, stating that it will continue to publish post-incident analyses and cooperate with trading partners to ensure fair and reliable market operations.
The clarification appears to have calmed most of the online speculation — but it also highlights how quickly misinformation can ripple through digital markets, even in an industry where data transparency has become more vital than ever.