According to the latest developments, the first official statement came from Binance today about the huge and sudden drop that occurred first in futures and then in the spot market on the cryptocurrency exchange Binance, especially concerning the Act I: The AI Prophecy (ACT) token.
The stock exchange made the following statement:
The declines in ACT prices have led to some users liquidating their futures positions and other low-market tokens also seeing declines. We are currently conducting further investigations into the causes of the declines in other tokens. So far, we have not identified any accounts that have profited significantly from this event. Since the ACT token supply is currently fully circulating in the secondary market, Binance cannot restrict or interfere with users’ selling behavior. However, rest assured that we will continue to investigate this incident and will provide further updates if there are any new developments.
A preliminary investigation found that: Three VIP users sold approximately 514,000 USDT worth of ACT tokens on the Binance spot market, transferred a large amount of ACT to a non-VIP user account, and then sold approximately 540,000 USDT worth of ACT on the Binance spot market.
Binance regularly adjusts the leverage levels of all futures pairs based on liquidity, market sentiment, and trading volume. In order to proactively prevent potential fluctuations and risks, we took precautionary measures to reduce the leverage ratio of the ACTUSDT USDⓈ-M perpetual contract, and no market abnormalities were experienced during the adjustments.
Considering the significant market volatility recently and to reduce risks for the protection of users, Binance will continue to adjust the leverage ratios of different pairs according to market conditions. Binance would like to take this opportunity to remind all users to take appropriate risk management measures when trading digital assets.
It was claimed that the reason for the decline was that market makers were not given enough time to adapt after Binance changed the limit on low leverage positions, and therefore market makers were liquidated.
ACT is still trading lower.
*This is not investment advice.
