The crypto market was thrown into chaos after US President Donald Trump threatened to impose 100 per cent tariffs on China and new export controls on software.
In a market already stretched by heavy leverage, the announcement led to one of the biggest selloffs in years.
The selloff snowballed into a $19 billion wave of liquidations as overleveraged bets were wiped out in hours.
Binance, one of the top exchanges, acknowledged the disruptions on its platform linked to the surge in volume and said it would review and compensate losses directly caused by its system failures.
In what was called “the largest liquidation event in crypto history,” CoinGlass data showed more than 1.6 million traders were liquidated in 24 hours, with $7bn flushed in a single hour.
Bitcoin price, which had reached an all-time high of $125,000 earlier this week, plunged 16 per cent, falling below $105,000 briefly.
It recovered to $112,000. Altcoins suffered heavy losses, tumbling between 30pc and 80pc.
As liquidations mounted, many users of centralised crypto exchanges reported failed orders, with some traders saying they were unable to close positions before blowups.
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