Binance Denies Glitch in Alleged $5M AKE Wipeout

"binance buy crypto"Binance rejects claims a system error caused $5M in trader losses after AKE's perpetual contract spiked nearly 492% on September 3. Inside the dispute.

A trader says a Binance malfunction cost millions when the AKE contract exploded. Binance says its machines worked fine. Here's the standoff.

AKE's Sudden Sept. 3 Surge

Binance is pushing back on claims that a glitch cost traders millions. The AKEUSDT perpetual contract rocketed from roughly $0.0076 to nearly $0.045 on September 3, a move that erased leveraged positions in minutes. One trader pegs the damage above $5 million and blames the exchange. Binance insists nothing broke on its end.

Trader Xunlu's Timed Complaint

On X, a user named xunlu says more than 30 funding-rate arbitrage positions were wiped out within minutes, clustered around 5:44 a.m. Beijing time on September 3. The trader tallies losses above 5 million USDT and argues the violent jump stemmed from coordinated activity in the AKE market - not from ordinary buying and selling.

Binance Says Nothing Broke

Responding through Customer Support, Binance rejected the idea that a technical fault triggered the wipeout. An internal review, the exchange says, turned up no problem in its pricing model, risk controls or liquidation engine. Its systems stayed online throughout the sharp move, leaving highly leveraged trades fully exposed once prices ran against them.

No Spot Listing on Binance

A key wrinkle: Binance never listed AKE for spot trading, so the perpetual can't lean on a Binance-built order book for its price. Instead, the exchange pulls data from several outside spot venues to calculate the contract's mark price. That multi-venue index, Binance maintains, functioned exactly as designed during the September 3 chaos.

A Nearly 492% Spike

The leap from about $0.0076 to nearly $0.045 works out to roughly 492% - almost six times the starting price. A jump that steep can drain the margin behind short positions in seconds, especially when liquidity is thin and many traders are crowded into the same bet. That fragility sits at the center of the losses.

Trader Calls It a Squeeze

The complainant frames the episode as a short squeeze: climbing prices force short sellers to buy back contracts, which pushes prices even higher and topples nearby shorts once they breach their maintenance margin. The affected trades were funding-rate arbitrage - a strategy meant to harvest funding payments while staying roughly neutral on price direction.

Records Demanded for Scrutiny

The trader wants Binance to hand over transaction records, liquidation data and internal risk-control logs so the mark-price math can be checked. Publicly aggregated spot charts showed wild swings that session, yet the highest combined spot reading landed below the contract peak the trader cited - a gap no one has fully explained.

Echoes of August's $3B Wipeout

For scale, an unrelated August squeeze liquidated about $2.77 billion in short positions across major exchanges, with Binance alone accounting for roughly $518 million. Forced buybacks drove prices up and set off further closures. The figures show how automated liquidations can snowball - but they don't prove manipulation touched AKE.

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