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ToggleSix months later , one of the most devastating flash crashes in the history of the cryptocurrency market has seen the truth revealed and a significant clarification issued.
Cathie Wood, founder of ARK Invest and known as the "female stock god," officially corrected her comments on the October 2025 crypto market flash crash in a podcast program she co-hosted with Binance founder CZ Zhao (CZ) yesterday (7th), clearing Binance of the major injustice of "triggering the crash."
Cathie Wood changed her tune: It was the sharp drop that caused the malfunction, not the other way around.
In an interview with Fox Business at the end of January this year (2026), Cathie Wood directly attributed the market flash crash on October 10, 2025, to Binance's infrastructure problems. She stated at the time:
"On October 10, a flash crash occurred due to a software glitch on Binance, resulting in margin calls and triggering a chain reaction of liquidations totaling $28 billion."
This statement was subsequently widely quoted by global media, leading market opinion to point the finger at Binance, questioning its system stability as the culprit behind the massive online meltdown.
However, in her conversation with CZ, Cathie Wood proactively clarified this. She pointed out that, based on subsequent, more in-depth data analysis, Binance did not trigger the flash crash . The actual causal relationship was: the extreme market crash occurred first, and the massive selling and liquidation pressure surged in instantly, leading to the trading platform's system overload and malfunction.
She further added that the market was already in a highly leveraged and extremely vulnerable state at the time, and the impact of macroeconomic sentiments such as "tariff panic" amplified the effect significantly. This was a chain reaction triggered by both overall economic sentiment and market structure, rather than the responsibility of a single exchange.
CZ expressed relief and gratitude: Finally, the misunderstanding in the public opinion has been clarified.
In response to Cathie Wood proactive public clarification, CZ, who was on the same stage, gave a very direct and positive reply.
CZ expressed his deep gratitude to Cathie Wood for being willing to clarify the facts. He admitted that after Cathie Wood previous remarks were widely circulated, many investors blamed Binance for the $28 billion collapse, unfairly accusing the platform. Now, having received clarification from one of the most influential institutional investors is of great significance to Binance.
A Look Back at the 10/10 Massacre: A $28 Billion Chain of Liquidations
Looking back at the extreme market conditions from October 10th to 11th, 2025, Bitcoin (BTC) experienced a flash crash of approximately 14% in a short period of time, and the entire derivatives market experienced an epic auto-deleveraging and chain liquidation, totaling a staggering $28 billion.
The sudden liquidity crunch triggered months of market turmoil. Cathie Wood's revised viewpoint not only helps bring market discussions back to a more rational perspective but also reminds investors that while any infrastructure may face technical challenges under extreme panic, the true root cause of a crash often lies deep within the market's excessive leverage and the fragility of the macroeconomy.
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