Binance has released a statement explaining the sharp price drop of several meme coins, including ACT, on April 1.
Role of VIP Users
On Binance's spot market, three VIP users sold a large amount of ACT tokens worth 514,000 USDT in a short time. Simultaneously, one non-VIP user transferred a large amount of ACT into their account and sold approximately 540,000 USDT worth of ACT.
Risk Reduction Measures
Binance stated it did not find a single account that made a significant profit from the sell-off. Since the ACT token is fully circulating in the secondary market, the exchange can't prevent people from selling their tokens. However, it will continue to investigate the issue and will provide updates if anything new arises. As a result, the leverage on the ACT USDT perpetual contract was reduced.
Advice for Traders
Binance regularly adjusts leverage levels based on market conditions, liquidity, and trading volume. Users were reminded to manage their risks properly while trading digital assets, as market conditions can change quickly.
Binance continues to monitor the situation and has taken steps to reduce potential risks, urging users to remain vigilant of market changes.
