Binance Glitch Sends ATOM and IOTX to Zero During Crypto Crash

An unexpected development took place during the impact of Friday’s crypto market fallout, in which several altcoins on Binance, including Cosmos (ATOM) and IOTX (IOTX), had prices on their trading interface appear as if they were suddenly at zero dollars, although the tokens were being traded normally on other exchanges and on the BTC/USD pair.

The sudden drop in prices that only appeared on Binance’s spot market interface appeared confusing and panicked traders watching major altcoins suddenly show no price and come back to market value seconds later. Overall, the incident looked more like a platform failure than a real market evaporation.

What caused the flash crash?

While Binance has yet to reveal any sort of security breach occurred, the exchange has acknowledged experiencing “system delays and heavy market activity during that period of sell-off.” Analysts feel that a unique mix of extreme volatility, thin liquidity, and margin liquidations is what triggered the flash crashes and, for a fleeting moment, pronounced zero-dollar ($0) quotes on some prices.

Sources indicated that there were liquidations on Binance’s Unified Margin system, which combines multiple assets for trading across a unified margin and collateral, which could have added to selling pressure as traders saw their positions become automatically liquidated due to leverage. Based upon heavy forced selling, this perhaps bled out all the buy orders on two specific trading pairs, ATOM/USDT and IOTX/USDT, quoted for zero dollars upon flash selling.

However, on other major exchanges, the price for ATOM and IOTX remained generally stable on other exchange platforms, such as Coinbase, KuCoin, and OKX, confirming this FLASH SELLING was specifically limited to Binance trading prices at the time.

Market response and user reactions

Traders flocked to social media channels such as X (formerly Twitter) and Reddit with screenshots of the zero-price situation. Some even accused Binance of “system manipulation,” while others called for more clarity into what caused the zero-price event.

After the incident, the tokens themselves showed no observable and real damage. ATOM quickly bounced back within hours. After the situation stabilized, Binance reassured users that operations were running smoothly; however, the incident rekindled their original concerns about centralized systems and how temporary spikes in volatility can reveal the fragility of high-frequency exchange mechanisms.

Takeaway

The flash crash serves as a reminder that even the most credible exchanges should not be below scrutiny and are subject to unexpected temporal factors that cause dread, disorder, and transaction freezes. For traders, it demonstrated the importance of using limit orders and having multiple exchanges in a portfolio to limit exposure to one platform.