Binance Announces $283 Million Compensation Plan
Binance has restored user trust after a market crash affected wrapped assets like wBETH, BNSOL, and USDe. The exchange announced a $283 million compensation plan for users impacted by the incident on Friday. The crash caused these tokens to lose their peg temporarily, leading to widespread losses.
The issue mainly hit Binance Earn markets linked to Ethena’s stablecoin USDe, Solana’s BNSOL, and Ethereum’s wrapped token wBETH. Binance confirmed it will reimburse users who traded on futures, margin, and loan markets using these tokens as collateral. Losses occurred between 21:36 and 22:16 UTC. The exchange also promised compensation for losses from Earn redemptions or internal transfers.
Binance Co-Founder Yi He apologized publicly, citing “significant market fluctuations and a substantial influx of users” as the cause. She urged affected users to contact customer service for compensation.
Market Crash and Infrastructure Strain
During the crash, Binance’s systems faced heavy pressure. This made it difficult for traders and market makers to access the platform. As a result, wrapped tokens lost connection to their actual asset values. AltLayer Founder YQ Jia compared the event to the 1987 portfolio insurance crisis, where automated systems increased sell pressure.
The glitch caused USDe’s price to drop below $0.66 on Binance, while it remained stable on other exchanges. Ethena Labs CEO Guy Young defended USDe, stating, “It is not accurate to describe this as a USDe depeg when a single venue was out of line.” He added that Ethena’s mint and redeem functions had no downtime and processed over $2 billion in withdrawals within 24 hours without issues.
Binance Updates Pricing and Fixes Errors
To prevent future problems, Binance introduced a new pricing system. This system bases wrapped token prices on their real values. For example, wBETH’s value now links to its underlying ETH ratio instead of volatile spot trades. Binance also added redemption prices to index weights and set a soft price floor for USDe.
The exchange addressed sharp price swings in tokens like IOTX and ATOM. Binance attributed these anomalies to outdated limit orders and display errors. According to CoinMarketCap, Binance’s native token BNB was trading at $1,315, up 14.42% in the last 24 hours.
