Binance has released a statement addressing the sharp price drop of several meme coins, including ACT, which saw significant volatility on April 1.
The exchange explained that three VIP users sold a huge amount of ACT tokens worth 514,000 USDT on the Binance spot market in a short time.
At the same time, one non-VIP user transferred a large amount of ACT into their account and sold about 540,000 USDT worth of ACT.
This was what caused the ACT price to drop, which led to the liquidation of some futures positions, and also caused other low-market-cap tokens to lose value.
Binance said it did not find a single account that made a lot of profit from the sell-off. Since the ACT token is fully circulating in the secondary market, the exchange can’t stop people from selling their tokens. However, the platform said it will keep investigating the issue and would update if anything new comes up
Binance said it regularly adjusted leverage levels based on the market’s situation, such as liquidity and trading volume.
After this incident, Binance took measures to lower the leverage on the ACT USDT perpetual contract. It mentioned that during this adjustment, no market anomalies were seen, and no users’ positions were forcefully closed.
The exchange also said it offers incentives to encourage market makers who help with liquidity on the platform to encourage more to join. To reduce risk, Binance also reminded users to manage their risks properly while trading digital assets, as market conditions can change quickly.
Also Read: Multiple Solana Altcoins Crash 60% on April Fools Day
The Crypto Times – Read More