A market maker's public accusation against Binance, claiming widespread trading failures during the Oct. 10 market crash, disappeared from social media this week. This occurred after the exchange provided technical logs that contradicted the claims of system errors for reduce-only orders. The incident raises questions about platform accountability and the transparency of cryptocurrency exchanges during periods of extreme volatility.
Key Takeaways
- •Market maker GammaPure deleted posts accusing Binance of failing to execute automated orders during the October crash.
- •Binance shared technical data indicating no system errors for reduce-only orders, contradicting initial claims.
- •The trader stated he received only standard compensation through Binance's recovery initiative, not a financial settlement for the post's removal.
- •Multiple exchanges experienced outages during the market downturn, with users reporting issues across various platforms.
Exchange Faces Scrutiny After Market Crash
The cryptocurrency market experienced significant losses on October 10, following announcements of tariff escalations. Binance users reported frozen accounts, halted stop-loss orders, and other platform malfunctions during the downturn. The exchange attributed these disruptions to intense trading activity, a claim that did not satisfy many traders who suspected the platform might have profited from the chaos.
Other major exchanges, including Coinbase and Robinhood, also encountered outages during the same period.
Binance announced a $400 million recovery initiative on October 14 in response to user backlash.
Trader GammaPure had previously posted claims asserting that he and other market makers lost millions when Binance allegedly failed to execute automated orders during the crash. He indicated he possessed evidence to support these allegations. The post gained considerable traction before its sudden removal from public view.
Technical Data Contradicts Initial Claims
GammaPure later addressed the deletion in a subsequent post, explaining that Binance's technical team provided comprehensive logs during a formal meeting. These logs indicated that reduce-only orders did not encounter the 503 errors he had initially reported. An investment firm connected to the trader participated in the investigation and reviewed global logs, confirming the absence of system errors for those specific order types.
"Yesterday, I created a group chat with some colleagues from Binance, marking the first time they had a full and formal conversation with me," GammaPure wrote. "My main argument was that 'API orders failed, and reduce-only orders returned a 503 error.' But Binance's technical team provided complete logs during our meeting, which showed that the reduce-only orders never encountered a 503 error."
The deletion of the posts fueled speculation across the industry. Some observers suggested that Binance applied pressure to remove the criticism. Others suspected a private financial arrangement motivated the takedown.
One analyst questioned on social media whether backroom deals influenced the removal of the posts.
Another user suggested the exchange was silencing critics through undisclosed means.
GammaPure refuted claims that Binance paid him to delete the posts. He stated that he received compensation solely through the exchange's "Together Initiative," which provided standard one-time payments to users who met specific criteria and had not filed formal claims. Cases involving formal complaints undergo individual review to determine platform responsibility before compensation decisions are made.
The trader explained that he chose to step back because he could no longer verify which information was accurate and did not want to spread misinformation. The incident highlights ongoing concerns about exchange reliability during market stress and the difficulties users face when challenging major platforms.
Understanding Key Terms
API orders are automated trading instructions sent through application programming interfaces, enabling traders to execute strategies without manual intervention. Reduce-only orders are specifically designed to close existing positions without opening new ones, serving as a crucial risk management tool during volatile periods. A 503 error indicates that a server is temporarily unable to handle requests, typically due to overload or maintenance.
Market makers play a vital role by providing liquidity through the placement of both buy and sell orders, profiting from the spread between bid and ask prices. During periods of extreme volatility, they face heightened risk when exchanges fail to execute orders as expected.
Broader Implications
The controversy underscores the inherent tensions between cryptocurrency exchanges and professional traders, particularly during market disruptions. While Binance provided technical evidence that contradicted the initial accusations, the episode raises broader questions about platform transparency and the mechanisms available to users seeking accountability from exchanges during periods of extreme market stress.