Rumors: US SEC May Be Probing Binance Over Oct. 10 $19B Liquidation Crash
Rumors have resurfaced that the US Securities and Exchange Commission (SEC) may be investigating Binance over the October 10, 2025 liquidation event — the largest single-market wipeout in crypto history. On that day roughly $19 billion in leveraged positions were liquidated, including $3.21 billion in a single minute, forcing about 1.6 million traders out as Bitcoin fell from ~$122,000 to ~$104,000. The claim of an SEC probe originates from social posts and is unconfirmed. Since the crash, Binance has attributed the event to macro shocks, paid roughly $283 million in compensation, and later offered about $600 million in relief to affected users and businesses. High-profile figures have weighed in: Ark Invest CEO Cathie Wood suggested a “Binance software glitch” caused the crash; OKX CEO Star Xu criticized Binance’s marketing; former CFTC official Salman Banaei compared the event to the 2010 Flash Crash and urged a formal review. Binance denies culpability and has sent cease-and-desist letters to social media users questioning its solvency. For traders, the renewed speculation about SEC involvement — even unconfirmed — raises regulatory and operational risk for Binance and could increase volatility in Bitcoin (BTC) and exchange tokens such as BNB. Key keywords: Binance, SEC investigation, October 10 liquidation, $19 billion liquidations, Bitcoin price drop, exchange risk, market volatility.
Bearish
An unconfirmed SEC probe into Binance over the October 10 liquidation increases regulatory risk and uncertainty around one of the largest crypto exchanges. Historical precedent shows regulatory scrutiny of exchanges tends to reduce market confidence and raise short-term volatility — for example, past enforcement actions and probes (e.g., Mt. Gox fallout, US cases against exchanges) precipitated sharp sell-offs and liquidity tightness. The October event already involved massive liquidations ($19B) and affected ~1.6M traders; renewed allegations and public debate (including claims of software glitches and inter-exchange accusations) could prompt outflows from Binance, widen bid-ask spreads, and amplify price swings in BTC and exchange tokens like BNB. In the short term, expect heightened volatility, lower liquidity on affected venues, and risk-off behavior among leveraged traders. In the medium-to-long term, if the SEC opens a formal investigation or levies penalties, the market could see sustained downward pressure on sentiment, stricter compliance costs for exchanges, and possible reallocation of liquidity to more regulated platforms — all bearish for risk-on crypto assets until clarity is restored. If the rumors are disproven quickly or Binance’s position is validated, the negative impact could be short-lived; however, the mere emergence of regulatory uncertainty typically favors cautious positioning among traders.