Altcoins Crash on Binance as Margin Changes Spark Speculation

Wintermute Dump, Margin Adjustments Blamed for $795M Market Cap Wipeout

A sudden and dramatic plunge in the price of multiple altcoins on April 1 blindsided crypto traders, despite generally bullish sentiment across the broader digital asset market. The most severe blow was dealt to ACT, a Solana-based memecoin, which lost nearly half its value in under 30 minutes. The ACT/USDT trading pair collapsed from $0.19 to just $0.089, forming a massive red candlestick that stunned even seasoned market watchers. 

The crash dragged ACT’s market cap down from a near $900 million peak to just $95 million—an 85% drawdown from all-time highs, and a 49.33% loss in the last 24 hours alone. Trading volume exploded 1,481% over the same period, hitting $372.86 million, a likely signal of cascading liquidations or panic selling triggered by algorithmic trading systems.

Other tokens followed ACT’s lead, though none fell quite as hard. DeXe (DEXE), a decentralized social trading platform, plunged 24.87% within the same brief window. dForce (DF), a DeFi protocol for liquidity provision, dropped 32.63%. 

Additional names caught in the freefall included KAVA, HIPPO, BANANAS31, LUMIA, TST, and QUICK—each registering sharp declines, though specific percentages remain unconfirmed. The collective nosedive raised eyebrows across crypto forums and social media, especially given the absence of major external news events or macro signals that might explain the synchronized drop.

Binance’s role in the event has come under scrutiny. Hours before the crash, the exchange implemented margin adjustments for perpetual contracts involving ACT and five other altcoins. While those adjustments may have contributed to increased volatility, ACT was the only token to experience a near-total wipeout, leaving many to speculate about deeper structural issues. 

Adding to the speculation, the well-followed X account “OnchainData Nerd” cited Arkham Intelligence data indicating that Wintermute, a prominent market-making firm, dumped a substantial amount of ACT tokens during the crash. 

The revelation fed into broader concerns that whale movements may have exaggerated the impact of Binance’s margin changes, turning what could have been a minor correction into a flash crash. Wu Blockchain also confirmed that ACT wasn’t alone in its descent, noting that several altcoins suffered abrupt losses during the same window.

Wintermute CEO, then, refused to be involved.

Other theories have emerged suggesting that a major market maker, possibly operating with automated trading bots, may have been forced to liquidate positions en masse—potentially triggering a domino effect that impacted other low-liquidity tokens in the same ecosystem.

Later on, Binance reported that the price drop was caused by four accounts selling ACT tokens. Three VIP users sold about 514 million USDT worth of tokens, while one non-VIP user liquidated 540,000 USDT after a deposit. This led to liquidations in futures positions and declines in other low market cap tokens. The platform claimed that it is investigating the reasons for these other declines.

ACT, launched on Binance in November 2024, gained notoriety as part of the AI memecoin wave that swept the market last year. Its hook was unique: a token built around a Discord server filled with autonomous AI chatbots engaging users in real-time conversation. 

That novelty helped it gain a cult following and eventually a listing on Binance. But the hype appears to have faded fast. One of the project’s original creators has already publicly distanced themselves from the token and liquidated their position, a move that may have foreshadowed the collapse.

The ACT team acknowledged the turmoil in a public statement posted on X, assuring holders that they are “fully aware of the current situation” and are “actively investigating and working collaboratively with all relevant parties to address this matter.” The post also mentioned that a response plan is in development “alongside our trusted partners,” with a promise to share updates soon.

Traders are mounting a significant backlash against Binance, leading to a social media campaign under the hashtag #BoycottBinance following the incident. Pseudonymous critics accuse the exchange of listing low-quality tokens and cite their belief that collective action could diminish Binance's market dominance. Some traders have publicly declared their decision to withdraw assets and cease trading on Binance altogether. 

Meanwhile, Wintermute, a market maker, became embroiled in the drama after executing concurrent trades to capitalize on price differences, which raised further questions about market manipulation. The exchange has not yet addressed the boycott, and BNB, its native token, has dipped by 2.5% amidst the controversies before recovering.

An on-chain detective, Dethective, noted that most Binance listings in 2025 are down, averaging a 44% loss. Similar trends were observed in 2024. Some traders attribute this decline to the exchange's focus on "scam shitcoins" instead of legitimate projects.

This article has been refined and enhanced by ChatGPT.