On April 1, 2025, altcoins faced a sharp decline in prices triggered by changes on the Binance exchange. Various analysts and community members investigated the reasons behind the incident.
Reasons for the Altcoin Price Drop
On April 1, 2025, more than a dozen altcoins experienced drastic losses. For instance, The AI Prophecy (ACT) token lost over 50% of its value, while DeXe (DEXE) and dForce (DF) dropped by 30% and 20%, respectively. The primary reason for the drop was the sudden increase in margin requirements on Binance, leading to mass liquidation of trader positions amid market panic.
Binance's Role and Manipulation Rumors
The situation escalated with Binance's changes, which raised minimum margin requirements. This led to speculations about possible manipulation by Wintermute. However, Wintermute denied these allegations, stating there were no malicious actions involved. The community's opinions were divided between accusations of manipulation and rumors of hacking.
Community Reaction and Company Next Steps
The price drop caused widespread panic among traders and intense discussions within the crypto community. Some users began to apologize to Wintermute, acknowledging that their accusations were premature. Meanwhile, Binance announced it would investigate the mass liquidations while confirming the need for new risk management rules.
The incident on April 1 demonstrated how changes in risk management at major exchanges can lead to significant volatility in the cryptocurrency market. There is a clear need for measures to protect investors from similar situations.
