On April 1, Binance did not have a good April Fools Day. The market was also played a real joke. First, the community speculated that $GUN was dumped by market makers/big players, and this matter has not yet been concluded. After an announcement, a more serious chain crash occurred tonight. What joke did Binance play on us on this April Fools Day?
Announcement
First announcement
The event of this plunge should first be traced back to an announcement yesterday. At 14:30 on the afternoon of March 31, Binance issued an announcement that Binance Contract will update the leverage and margin tiers of 1000 SATSUSDT and ACTUSDT U-margin perpetual contracts at 17:00 on the same day and reminded users that their current positions will be affected, and due to the update of leverage and margin tiers, the consistency grid strategy may be affected and terminated. It is recommended that users make corresponding adjustments in time before the change.
Change announcement again
Just one day later, at 15:32 on April 1, Binance issued another announcement, Binance Contracts will update the leverage and margin tiers of 1000 SATSUSDT, ACTUSDT, PNUTUSDT, NEOUSDT, NEOUSDC, TURBOUSDT and MEWUSDT U-margin perpetual contracts at 18:30 on April 1, 2025. This announcement not only revised the $ACT position limit that had just been changed the day before, reducing the low leverage position limit by 50% again, but also left users with less than 3 hours to react.
A complete collapse
ACT, DEXE, HIPPO, BANANAS 31, TST, PNUT and other tokens all fell by as much as 50% at almost the same time. From 18:30 to 18:35, the total value of ACT contract positions on the Binance platform plummeted by 76.53%, from $94.1286 million to $22.0932 million. The community was immediately detonated. Obviously, the impact of Binances rule change has far exceeded everyones imagination, and everyone speculated on the cause of the plunge.
Market Maker Doubts
The first suspects were market makers. WinterMute, the market maker of $ACT and multiple MemeCoins with the largest decline, was pushed to the forefront. Twitter KOL 0x James observed that addresses related to WinterMute were clearing Meme positions on the chain. Wintermute sold about $250,000 worth of ACT tokens through Raydium at a high frequency in the past half hour.
Market makers come forward to clarify
However, some people believe that this is not the case after analysis. A Web3 philosopher said that there is a significant delay between the CEX dump and the on-chain liquidation. If WinterMute wants to liquidate Meme, it does not conform to the principle of maximizing benefits.
Then WinterMutes founder and CEO Evgeny Gaevoy responded to netizens questions and left a message saying Its none of our business, and we are also curious about what happened after the fact. He also said that the on-chain selling behavior was a reaction to the sharp fluctuations in token prices, which automatically arbitraged the AMM pool.
Australian BroLeon expressed doubts about Gaevoys statement, saying that 70% of $ACT chips are in the exchange, and there is no way to know the truth just from the chain. He hopes that Binance can conduct an in-depth investigation and come up with a satisfactory answer, otherwise it will have a very negative impact on the market.
Binance Rule Change Factors
Of course, some people believe that it is not the market makers who abandoned the market, but the change of Binance rules. First of all, the adjustment of the rules directly affects the market liquidity. Binance adjusted the position limit and leverage multiples of the contract in order to reduce market risks. But this has a great impact on market makers. The reduction of the position limit forces them to reduce their positions or even be forced to close their positions, and the reduction of leverage multiples forces them to reduce leveraged positions. Market makers usually hold both spot and contracts to hedge risks. If the position exceeds the new upper limit, or there is insufficient funds after the leverage is reduced, the system will force the position to be closed and sold in the contract market, thereby reducing the contract price.
As the spread between spot and contract prices continued to widen, coupled with robot arbitrage, they bought at low prices in the contract market and sold in the spot market at the same time, waiting for the spread to narrow and then made a profit. Robots sold in large quantities in the spot market, further depressing the spot price. As market makers closed their positions, the contract price fell, and the robot arbitrage caused the spot price to fall. The overall decline led to panic in the market, and retail investors also followed suit, forming a chain of plunges, which led to the collapse of the Memecoin market.
Benson Sun, a crypto KOL and former FTX community partner, said, Before changing the rules, Binance should first evaluate how many positions will be liquidated. If a market maker has a large position, it should also notify them in advance. As an industry leader, I hope Binance can handle this incident properly.
The truth remains a mystery
After the markets suspicion of market makers, Binances rule errors, and even internal misconduct, KOL Zishi said that it had nothing to do with the above and said that he was just stating the facts. He Yi commented on this tweet with a hey, showing his helplessness.
At the time of publication, He Yi tweeted that the corresponding team is preparing to respond with details, and it is still too early to judge how the matter is going. Binance, which has had a lot of bad luck recently, has indeed encountered some problems that have to be solved. BlockBeats will continue to pay attention to this matter and follow up on it.
