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Binance has denied that a system failure caused the AKE liquidations that allegedly cost one trader more than $5 million, setting up a dispute that turns on a technical question with wide consequences for every leveraged trader: how an exchange should price a perpetual contract for a token it does not offer on its own spot market.
The controversy began when X user xunlu alleged that more than 30 funding-rate arbitrage positions were liquidated within minutes around 5:44 a.m. UTC+8 on Sept. 3, as the AKEUSDT perpetual contract surged from about $0.0076 to nearly $0.045 — a rise of roughly 492%, or almost six times the starting price, in a thin market. The trader estimated losses at more than 5 million USDT and characterized the move as coordinated manipulation rather than ordinary trading, requesting Binance's transaction records, liquidation data and risk-control logs for independent examination.
Binance's defense: the market moved, the machines worked
Binance Customer Support responded that AKE recorded large price swings across several exchanges and on-chain markets during the same period, attributing the liquidations to market conditions rather than any platform fault. The exchange said an internal review found no error in its pricing model, risk controls or liquidation engine — its systems remained operational while the contract moved sharply, and leveraged short positions were exposed to an adverse price change. A liquidation can occur without any outage: once collateral falls below the maintenance margin a position requires, the platform closes the trade automatically to prevent the account from going further into deficit, and crypto's around-the-clock structure leaves traders little time to add collateral during fast moves.
The trader's alleged strategy deserves scrutiny of its own. Funding-rate arbitrage is often described as market-neutral — one version pairs a spot purchase with a short perpetual to collect funding payments — but the structure still carries execution, liquidity, collateral and exchange risk. A cash-and-carry position can face a margin call when its leveraged leg moves sharply even if the combined trade is designed to avoid directional exposure. The week's other big risk-management debate followed the same pattern: parameters that looked safe until someone tested them.
The mark price problem behind the AKE liquidations
The technical heart of the dispute is the mark price. Binance does not list AKE for spot trading, so the AKEUSDT perpetual cannot reference a Binance order book. The exchange instead calculates the contract's mark price from an index spanning several external spot venues — a design intended to reduce the effect of a single bad print. Perpetual futures determine liquidations by mark price rather than last traded price, which makes the composition and behavior of that external index central to whether the liquidations were fair. Publicly available aggregated spot charts showed heavy volatility during the session, but the highest combined spot reading was reportedly below the contract peak the trader cited — a gap that could stem from differences between the futures price, external venues or the index itself, without establishing which.
The episode lands in a week of aggressive leverage across markets. In August, a $3 billion squeeze liquidated roughly $2.77 billion in short positions across major exchanges, with Binance accounting for about $518 million of the total — a reminder that automated closures can accelerate an existing move, though they do not establish manipulation in AKE. No regulator or independent investigator has publicly reached a finding on the allegation, and Binance has not accepted the manipulation claim.
Why U.S. traders watch from the outside
The AKEUSDT dispute concerns an offshore Binance product not offered through Binance.US. American crypto derivatives access remains governed by CFTC rules, with regulated perpetuals only entering the U.S. market in 2026 — Kalshi's CFTC-approved contracts and Coinbase's domestic filings represent the compliant route, with leverage limits and market-surveillance requirements that offshore platforms do not carry. For offshore traders, the case is a live illustration of the risk that sits between a hedged position and a sixfold price move: the exchange gets to choose the index, and the trader only gets to read the liquidation notice.
