Binance’s margin update triggered a 50% drop in Solana meme coin ACT, causing liquidations and sparking criticism over the sudden policy change.
Published: Apr 2, 2025 at 02:45 AM
- Binance’s margin update triggered a 50% drop in Solana meme coin ACT.
- A $3.79M ACT whale liquidation fueled broader market sell-offs.
- Traders criticized Binance for sudden changes with minimal notice.
A Binance update on margin and leverage tiers has led to severe price drops for multiple altcoins, with Solana-based meme coin ACT suffering the most significant losses. The sudden rule change caused a wave of liquidations, sparking criticism from traders and industry experts.
According to an X post, the new Binance update has caused substantial losses for several altcoins. ACT experienced the largest drop by falling over 50% during a span of 30 minutes. DEXE and DF both suffered substantial declines during this period with 23% and 16% losses respectively.
Market participants were left scrambling to identify the cause of the sharp declines. Initial speculation pointed toward major sell-offs, as large sell orders triggered a surge in spot trading volume. Market maker Wintermute became a suspect among traders who believed they initiated the recent sell-off. CEO Evgeny Gaevoy rejected claims of intentional activity and stated Wintermute merely responded to the market movement instead of initiating it.
The sudden downturn stemmed from Binance’s decision to adjust margin and leverage tiers for specific tokens, including ACT. The exchange announced the changes on April 1, stating that the adjustments would impact existing positions. The update took effect almost immediately, leaving traders with limited time to react.
One ACT whale saw a $3.79 million position liquidated at a price of $0.1877. The liquidation event triggered a broader market sell-off, compounding losses for ACT holders.
Former FTX community manager Benson Sun criticized Binance for implementing the changes without sufficient notice. He noted that exchanges should evaluate the impact on traders before making such adjustments.
ACT experienced a drastic price drop even as other market segments showed signs of recovery. Compound (COMP) along with other cryptocurrencies experienced gains reaching 70% during this period which underscores Binance’s margin update effects on particular tokens.
Both market analysts and traders showed their dissatisfaction with how Binance managed the update. The majority of market participants believe exchanges must provide sufficient time to users for position adjustments before introducing changes that affect leverage and margin requirements. The absence of advance warning put traders at risk for forced liquidations which caused substantial financial losses.
Recent weeks have seen growing criticism towards Binance because it left Pi Network out of its Vote to List program. The stock price of MUBARAK dropped by 40% after its listing which raised questions about how Binance affects market trends. The current investigation emphasizes the rising need for open exchange operations.
Traders faced substantial losses after Binance’s margin update caused a rapid drop in Solana meme coin ACT and other altcoins. The unexpected modification led to obligatory liquidations which generated doubts about how the exchange makes operational decisions.
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