Altcoin Flash Crash: Binance Users See ATOM Hit Zero Amid $20B Liquidations

• Binance altcoins briefly hit zero amid $20B liquidation cascade.
• System overload and a liquidity vacuum were blamed for the flash crash.

On October 12, 2025, Cointelegraph reported that multiple altcoins, including ATOM and IOTX, briefly crashed to zero exclusively on Binance. The incident occurred during a broader cryptocurrency market downturn, creating severe disruptions for traders on the platform.

The event was sparked by nearly $20 billion in leveraged crypto positions being liquidated across the market. Binance users, who frequently trade with borrowed funds to magnify returns, faced widespread margin calls as prices began to tumble. This automated process triggered the sale of cryptocurrencies used as collateral, unleashing a wave of sell orders and amplifying downward price pressure.

During this cascade, Binance’s trading systems struggled to cope with the extraordinary volume of activity. Many users reported temporary account freezes, while others noted that stop-loss orders failed to execute as intended. These system breakdowns left traders unable to react to the rapid price movements, leading to compounded losses.

Meanwhile, market makers—key players responsible for maintaining liquidity by placing buy and sell orders—responded to the system constraints by withdrawing their funds from Binance. This created a liquidity vacuum, leaving some altcoins, including ATOM and IOTX, without buy-side support. Consequently, these tokens temporarily hit zero on Binance’s order books, though they retained significant value on other exchanges, indicating the issue was localized rather than market-wide.

In response to the disruption, Binance's CEO Richard Teng and co-founder Yi He issued public apologies. They promised compensation for users who could verify losses caused by system failures but clarified that losses stemming solely from price volatility would not be reimbursed. The exchange also committed to enhancing its infrastructure to better manage similar events in the future.

As of October 12, 2025, 15:12 UTC, Cosmos (ATOM) is trading at $3.40, reflecting a 6.8% 24-hour change, according to CoinMarketCap. IOTX is priced at $0.149, showing a 2.94% 24-hour change.