Binance announces its largest-ever compensation program to cover user losses due to technical issues during recent market liquidations worth $700 million worldwide.
Binance may soon launch its largest compensation program yet. This move therefore follows the recent extreme market volatility. The exchange is designed to compensate users who have lost their funds due to transaction issues. However, the compensation will be limited to losses directly attributable to the problems of the Binance platform. This commitment reflects the exchange’s commitment to its user base.
Binance apologizes and announces individual loss assessment
Binance co-founder He Yi spoke to the community. She sincerely apologized to users for the problems they had with transactions. These problems were mainly caused by high market volatility. They were also the result of a significant increase in users over a 16-hour period. This heavy traffic caused an overload on system performance.
He Yi asked users to contact customer service immediately. So, users who suffered losses due to Binance need to register their cases. The exchange also offers a rating for each account activity. Moreover, they will take a close look at the entire scenario. Users will be appropriately compensated after this evaluation.
Related literature: Bitcoin Crash: Bitcoin Plunges Below $102,000 as US-China Tariff War Causes Market Chaos | Live Bitcoin News
The recent volatility has been driven by major world events. For example, Bitcoin recently fell below $102,000. This was stimulated by the tariff war between the US and China. The fear of war therefore caused a massive market crash. As a result, the amount of liquidations in global markets reached a staggering $700 million.
Binance data may confirm Bitcoin’s volatile flash crash. Indeed, BTC bounced back to $110,563.5 from the bottom. Even on a daily basis, the price fell by 7.03%. Ether was also very volatile at the time. Furthermore, ETH fell to a low of $3,400.00 before finishing slightly higher.
The total liquidation amount was approximately $706.2 million. This happened within a period of 24 hours. The long positions in particular recorded a huge loss of $648.5 million. Therefore, this event has been recorded as the largest single-day liquidation this year. The market pressure was high and unprecedented.
The largest Binance compensation program aims to restore user trust
He Yi clearly set the boundaries of the compensation program. Importantly, losses due to general market movements are not allowed. Furthermore, unrealized gains are also not compensated. This is a standard policy on all major exchanges in the world.
The total number of liquidations across all markets was even higher. The total amount was $19.134 billion. Of this enormous amount, approximately $16.679 billion consisted of long positions. Therefore, most of the losses were due to market forces and not platform errors. Binance only focuses on the technical errors.
He Yi clearly affirmed Binance’s central philosophy. Lena Postolskaya also said that Binance does not immediately avoid problems. That is why they take full responsibility if the exchange is not in order. She emphasized that there should be no excuses or reasons for their failures.
The exchange aims to serve all its users responsibly. As such, they will take care of all issues for which they are responsible. The market is still volatile and very erratic at the moment. Therefore, He Yi advised that users should be more aware of the potential risks of investments at all times. This wise caution is also accompanied by a very liberal reward system.
This will significantly help build users’ trust in the platform. Ultimately, open communication about technical glitches is the key to market leadership in times of crisis market crash. Binance’s largest compensation plan in history sets a new benchmark. It guarantees protection against the impact of platform shortcomings on users. This step clearly separates currency-related risks from general investment risks.
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