Binance Sues Trader Edison Zhang After SOL/USDT ’Wick’ Liquidation Dispute
Binance has initiated legal action against retail trader Edison Zhang after Zhang publicly alleged that a sudden SOL/USDT price “wick” on October 11, 2025 forced liquidation of his leveraged positions. Zhang says his positions were liquidated at $145 while the market low reached $141, wiping his account and years of savings. He shared trade screenshots and customer-support transcripts that he says show rejected service tickets and guidance pointing him to standard public announcements rather than active client protection. Zhang sought regulatory help in Abu Dhabi but found the FSRA did not have jurisdiction over the Binance entity he used; he then looked into Binance’s ADGM registration. After Zhang’s public posts, he received a February 3 cease-and-desist from Al Tamimi & Company purportedly representing Nest Exchange Limited (Binance.com), which stated Binance prefers arbitration via the Hong Kong International Arbitration Centre or the ICC. Binance subsequently filed arbitration with HKIAC, citing applicable arbitration clauses. The dispute centers on exchange execution, custody and notification practices, jurisdictional limits, and dispute-resolution paths for leveraged traders. For crypto traders, the case underscores the need to review margin settings, safeguard evidence (trade screenshots and order books), understand exchange terms (liquidation mechanics and arbitration clauses), and consider legal counsel when large liquidations occur. Primary keywords: Binance, SOL/USDT, liquidation, wick, leveraged trading. Secondary keywords: arbitration, HKIAC, ADGM, FSRA, customer support, margin call.
Bearish
The dispute centers on a forced liquidation event in SOL/USDT and legal action that questions the exchange’s execution and risk controls. Short-term: the story may increase selling pressure or volatility around SOL as traders react to allegations of unfair liquidations and potential market-manipulation claims; risk-averse traders may reduce leverage or exit positions, amplifying downside moves. Mid-term: uncertainty about dispute resolution (arbitration clauses, jurisdiction) and negative publicity can erode confidence in Binance as an execution venue for leveraged SOL trading, which may reduce liquidity and increase spreads for SOL derivatives. Long-term: unless Binance’s operational integrity is vindicated or clarified, persistent doubts could keep some leveraged traders away or prompt migration to venues perceived as more transparent, exerting sustained negative pressure on SOL derivatives volumes and price support. Offsetting factors include SOL’s broader network fundamentals and market-wide liquidity, which could limit the price impact if broader demand returns. Overall, the immediate effect is likely bearish for SOL until regulatory or legal clarity is provided.