Binance denies system error in alleged $5M AKE loss

Binance responded to a trader’s claim that more than 30 funding‑rate arbitrage positions were liquidated on September 3, resulting in losses estimated at over 5 million USDT. The trader alleged that the rapid price rise of the AKEUSDT perpetual contract was caused by coordinated market activity, not ordinary trading.

Trader’s allegation

The complainant, identified as user Xunlu, said the AKEUSDT contract jumped from roughly $0.0076 to almost $0.045 within minutes, triggering liquidations at around 05:44 UTC+8. The trader estimated the total loss at more than 5 million USDT and requested Binance’s transaction records, liquidation details, and risk‑control logs for review.

Binance’s response

Binance Customer Support stated that the price swing was observed across several external spot and on‑chain markets. The exchange maintains that its pricing and liquidation systems operated normally, and an internal review found no fault in its pricing model, risk controls, or liquidation engine. Binance explained that the AKEUSDT mark price is derived from a multi‑market index that aggregates data from external spot venues, as Binance does not list AKE for spot trading.

How liquidations work

When a trader’s collateral falls below the maintenance margin, the platform automatically closes the position to prevent a larger deficit. In volatile markets, this process can occur within minutes, leaving little time for traders to add collateral. The mark price, not the last traded price, typically determines liquidation triggers for perpetual futures.

Market context

The AKE price increase represented roughly a 492 % rise, a move that can quickly erode margin for short futures positions, especially in thinly‑liquid markets. Binance noted that similar short‑squeeze dynamics have occurred in other events, such as an August squeeze that liquidated billions of dollars across major exchanges, but did not link those events to manipulation in the AKE case.

Regulatory backdrop

The disputed product is an offshore Binance offering not available on Binance.US. U.S. traders access regulated perpetual futures under CFTC oversight, with recent approvals for Bitcoin and other digital‑asset contracts. No regulator or independent investigator has issued a finding on the AKE allegation.

Next steps

The trader continues to seek full disclosure of the September 3 session’s transaction history, liquidation records, and risk‑control logs. Binance has not offered compensation and maintains that the liquidations resulted from market risk rather than a technical fault.