$600 billion in claims: Traders plan lawsuits against crypto-exchanges after the crash

Following a market collapse on October 10–11 that wiped out approximately $600 billion in just 30 minutes and triggered forced liquidations of 1.7 million wallets, groups of affected crypto investors are now considering legal action against centralized exchanges (CEXs).

Thousands of traders have joined audio-chats to discuss possible legal strategies. One such group reported cumulative losses exceeding $100 million. Experienced market participants are exploring potential grounds for class-action lawsuits, searching for evidence of misconduct or contract breaches by major trading platforms.

Because filing individual lawsuits can be prohibitively expensive, many victims are leaning toward collective litigation. According to Arthur Chong of Defiance Capital — who posted an invite to participate in possible class actions — over 85,000 views have been logged on the invitation alone.

The exchange Binance is likely to become the primary target. During the crash it recorded some of the lowest prices on the market, including anomalous drops of up to 99.9%, far steeper than those experienced on other platforms. Binance’s size and resources also make it a convenient defendant for large-scale suits.

Some firms have already indicated they are investigating legal options. For example, says it experienced automatic de-leveraging (ADL) of nearly all positions “at very odd prices,” particularly on Binance, and is assessing its legal stance.

If these class actions proceed, this case could become one of the largest precedents in the crypto-industry, potentially redefining the liability of exchanges toward their customers.