ACT Price Crashes Over 50%: Binance Investigation Links Drop to Four Major Sellers

On April 1, 2025, while the broader cryptocurrency market remained relatively stable, several altcoins on Binance experienced sharp declines. Among them, ACT saw the most significant drop, plunging 53% within 24 hours. Other affected tokens included DEXE (-28%), DF (-19.3%), and TST (-14.2%). The sudden crash has triggered widespread speculation and discussion within the crypto community.

Source: CoinGecko

Forced Liquidation and Whale Losses

Blockchain analyst @lookonchain reported that Binance's recent updates to leverage and margin requirements for multiple tokens, including ACT, led to forced liquidation of a whale holding substantial ACT positions. The liquidation occurred when ACT was priced at $0.1877, resulting in a loss of approximately $3.79 million for the whale. Interestingly, other tokens subjected to similar margin adjustments—such as 1000SATS, PNUT, NEO, TURBO, and MEW—did not experience comparable price volatility.

Wintermute's Role and CEO's Defense

Further speculation arose when on-chain analyst @OnchainDataNerd revealed that market maker Wintermute had offloaded a substantial volume of ACT tokens shortly before the crash. This raised concerns that Wintermute's actions might have contributed to the decline. However, Wintermute's CEO, Evgeny Gaevoy, denied any involvement in causing the crash. He clarified that Wintermute's automated market-making operations engaged in arbitrage only after significant price movements had already occurred. Gaevoy emphasized that Wintermute was also investigating the incident to understand its root causes.

Source: ARKM

Community Theories and Binance Co-Founder’s Response

Community member @CnmdRain speculated that Binance’s reduction of leverage limits disrupted the existing market equilibrium. Market makers reliant on high leverage and large positions were forced to liquidate, creating downward pressure on ACT’s price in both futures and spot markets. DJJ suggested that Wintermute’s actions might have been defensive or opportunistic rather than a direct cause of the crash. Adding to the cascading effect, panic selling by retail investors contributed to the steep decline.

In response, Binance co-founder Yi He dismissed claims that Binance’s margin adjustments were responsible for the crash.

Binance Investigation and Findings

Following Yi He's response, Binance released an official investigation report, offering a detailed analysis of the events leading to the price collapse. The report revealed that three VIP users collectively sold ACT tokens worth approximately $514,000 in the spot market, while one non-VIP user transferred and sold an additional $540,000 worth of ACT tokens from external sources. These sell-offs created significant downward pressure on ACT’s price, triggering cascading liquidations in the futures market.

In the statement, Binance clarified that no evidence has been found of a single account making significant profits from the incident. The platform emphasized that since the token is fully circulating in the secondary market, Binance cannot intervene in users' selling activities. Binance assured the community that it will continue investigating the matter and will provide updates as new findings emerge.

Additionally, Binance explained its decision to adjust ACT's leverage and margin requirements. According to the announcement, the measures were taken proactively to mitigate potential market volatility and risks. Binance highlighted that it had recently issued consecutive adjustment notices for ACTUSDT perpetual contracts, during which the market remained stable. The platform reiterated that it did not forcibly liquidate or reduce any users' positions during the adjustment period.

Investor Implications and Remaining Questions

Despite Binance’s comprehensive report, the incident has left the crypto community with lingering questions about transparency and the true causes behind the crash. The event serves as a stark reminder of the inherent risks in cryptocurrency trading, especially for tokens with low liquidity and high leverage exposure. Investors are urged to adopt robust risk management strategies to navigate volatile markets effectively.

As investigations continue, follow us for updates on Binance’s actions and the latest developments in this evolving story.