Binance Leverage and Margin Tier Changes Blamed for Some Altcoins' Plunge

Son Min

Summary

It was stated that Binance's changes in leverage and margin tiers caused a plunge in some altcoins.
Specifically, DAI Prophecy (ACT) plunged more than 50%, and a whale was liquidated for $3.79 million.
It is evaluated that the adjustment of the Maintenance Margin Ratio triggered a cascade of liquidations and a market plunge in the virtual asset market.

As some altcoins on Binance have significantly dropped, it is suggested that Binance's perpetual futures-related updates may have triggered a cascade of liquidations.

On the 1st (local time), Lookonchain stated on X, "After Binance changed the leverage and margin tiers, and Maintenance Margin Ratio (MMR) for some tokens like DAI Prophecy (ACT), a whale was liquidated for $3.79 million." It added, "Subsequently, ACT plunged more than 50%."

Accordingly, within the virtual asset (cryptocurrency) community, there is a growing consensus that Binance's change in Maintenance Margin Ratio triggered a cascade of liquidations, leading to a market plunge. The Maintenance Margin Ratio refers to the minimum asset ratio that must be maintained in an account to keep a position in futures or margin trading.

Previously, Binance announced in a notice, "We will update the leverage and margin tiers for 1000SATS/USDT, ACT/USDT, PNUT/USDT, NEO/USDT, NEO/USDC, TURBO/USDT, and MEW/USDT perpetual futures."

ACT