On April 1st, Binance did not have a pleasant April Fools' Day, and the market was served a real joke. First, $GUN was suspected by the community of being dumped by market makers/whales, and this matter was still unresolved. After a notice, an even more severe chain collapse occurred tonight. What joke did Binance play on us on this April Fools' Day?
Notice Turbulence
First Notice
This crash should first be traced back to a notice yesterday. On March 31st at 14:30, Binance issued a notice "Binance Contracts Will Update Leverage and Margin Tiers for 1000SATSUSDT and ACTUSDT U-margined Perpetual Contracts at 17:00 on the Same Day" and reminded users that their current positions would be affected. Due to the update of leverage and margin tiers, consistent grid strategies might be terminated and users were advised to make corresponding adjustments in advance.
Second Notice
Just a day later, on April 1st at 15:32, Binance issued another notice, "Binance Contracts Will Update Leverage and Margin Tiers for 1000SATSUSDT, ACTUSDT, PNUTUSDT, NEOUSDT, NEOUSDC, TURBOUSDT, and MEWUSDT U-margined Perpetual Contracts on April 1st, 2025, at 18:30". This notice not only again modified the $ACT position restrictions "further reducing low-leverage position limits by 50%", but also gave users less than 3 hours to react.
Comprehensive Collapse
Multiple tokens including ACT, DEXE, HIPPO, BANANAS31, TST, and PNUT experienced drops of up to 50% almost simultaneously. From 18:30 to 18:35, the total contract position value of ACT on Binance's platform directly plummeted by 76.53%, from $9.4186 million to $2.2093 million. This instantly ignited the community, and it was clear that the impact of Binance's rule changes far exceeded everyone's imagination, leading to widespread speculation about the cause of the crash.
Market Maker Suspicions
Market makers were the first to be suspected. Wintermute, the market maker for $ACT and several Meme coins with the largest drop, was pushed to the forefront. Twitter KOL 0xJames observed that addresses related to Wintermute were liquidating on-chain Meme positions. Wintermute sold approximately $250,000 worth of ACT tokens through Raydium in high frequency within half an hour.
Market Maker Clarification
Some analysts believed otherwise. Web3 philosopher stated that "There is a clear time delay between CEX dumping and on-chain liquidation, and if Wintermute wanted to liquidate Meme tokens, it would not align with the principle of maximizing interests."
Wintermute's founder and CEO Evgeny Gaevoy responded to netizens' doubts, saying "It's not our doing, and we're also curious about what happened afterwards" and explained that the on-chain selling occurred in response to the token's violent price fluctuations, automatically arbitraging AMM pools.
BroLeon expressed skepticism about Gaevoy's explanation, stating that 70% of $ACT tokens are in exchanges, and the truth cannot be determined from on-chain data alone. He hoped Binance would conduct an in-depth investigation and provide a satisfactory response, otherwise it would have a very negative impact on the market.
Binance Rule Change Factors
Some believed the issue was not market makers abandoning positions, but Binance's rule changes. First, the rule adjustments directly affected market liquidity. Binance adjusted contract position limits and leverage multiples to reduce market risk. However, this significantly impacted market makers, forcing them to reduce positions or even close positions, and reduce leverage. Market makers typically hedge risks by holding spot and contract positions simultaneously. If positions exceed the new limit or funds are insufficient after leverage reduction, the system's forced liquidation in the contract market would sell, thereby lowering contract prices.
As the spot and contract price difference continued to expand, coupled with arbitrage bots buying at low prices in the contract market and selling in the spot market, bots selling large quantities in the spot market further depressed spot prices. Market makers' liquidation causing contract price drops, combined with arbitrage bots' spot price drops, led to overall decline. This triggered market panic, causing retail investors to follow suit and sell, resulting in a chain reaction crash and ultimately a comprehensive collapse of the Meme coin market.
Crypto KOL and former FTX community partner Benson Sun commented, "Binance should have assessed how many positions would be liquidated before modifying rules. If market makers have large positions, they should be notified in advance. As an industry leader, we hope Binance can handle this incident properly."
The Truth Remains a Mystery
After experiencing market suspicions about market makers, Binance's rule mistakes, or even internal malice, KOL Zishi stated that none of these were related and merely stated the facts. He Yi commented with a "Sigh" under this tweet, showing helplessness.
He Yi posted a tweet saying "The corresponding team is preparing a detailed reply", and the situation cannot be judged at present. Binance, which has recently encountered numerous challenges, indeed faces some issues that must be resolved. BlockBeats will continue to follow and report on this matter.
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