After the billion-dollar liquidation crisis on October 10–11, Binance, under public pressure, issued two consecutive tweets on October 12 from co-founder He Yi apologizing for the incident, claiming "a line-by-line verification and compensation for all losses caused by Binance." Subsequently, Binance launched the "Unity Initiative" and other compensation mechanisms, announcing a $283 million fund to compensate affected users.

However, as the compensation process unfolded, mounting controversies emerged: an extremely narrow compensation scope, opaque criteria, burdensome liability waivers, negligible payout amounts, evasive customer service, and even evidence of preferential treatment—private full reimbursements for high-traffic KOLs while ordinary users received nothing. The following analysis, supported by real user cases, customer service records, and screenshots of compensation agreements, comprehensively exposes the hypocrisy and injustice behind Binance’s compensation scheme, with each controversy backed by verifiable evidence, directly implicating Binance’s negligence and lack of accountability.

Controversy One: Extremely Narrow Compensation Scope, Excluding Most Affected Users—“Binance Cause” Used as Evasion Tactic

Binance's official announcement explicitly limits compensation to users who “used USDe, WBETH, or BNSOL as margin or collateral during their de-pegging events and were subsequently liquidated.” This deliberately excludes the vast majority of users suffering abnormal liquidations due to system latency, stop-loss failure, price deviation, or asset transfer delays, using “market volatility” as an excuse to evade responsibility.

Real Case 1: Mr. Zhang (Loss of $1.78M) — Stop-loss failure led to liquidation; appeal rejected; customer service claims “outside compensation scope”

Mr. Zhang, a veteran trader (as referenced earlier), suffered a $1.78 million loss primarily due to Binance system latency, stop-loss failure, and price deviation—unrelated to the de-pegging of USDe, WBETH, or BNSOL. After liquidation, he immediately contacted Binance’s dedicated support team, submitting stop-loss screenshots, system failure recordings, cross-platform price comparisons, and detailed loss breakdowns, demanding compensation in line with He Yi’s apology promise.

Yet, customer service consistently responded dismissively: “Your loss resulted from extreme market volatility unrelated to platform faults; since it does not involve the specified assets’ de-pegging, it falls outside the compensation scope, and Binance bears no liability.” Mr. Zhang rebutted that system failures at Binance encompassed not only de-pegging but also latency and stop-loss malfunctions, and He Yi had promised “full compensation for all losses caused by Binance.” However, customer service repeatedly insisted, “The official announcement prevails.”

To date, Mr. Zhang has submitted three appeals, all denied, with no substantive response upon every follow-up. He stated that tens of thousands of users like him—affected by system latency and stop-loss failure—are being excluded intentionally, which is merely Binance’s way of avoiding responsibility. He will continue appealing and exposing the truth.

Real Case 2: A Quantitative Trading Team (Loss of $8.08M) — API failure caused order rejection; appeal ignored

Mr. Wang’s quantitative trading team (referenced earlier) incurred an $8.08M loss due to Binance API interface anomalies, system lag, order rejections, and price deviation—entirely unrelated to the de-pegging of designated assets. After liquidation, the team repeatedly submitted transaction logs, order records, system failure evidence, and loss breakdowns, requesting verification and compensation.

However, Binance customer service only replied: “Under review, please wait patiently.” For over a month, regardless of how frequently the team inquired about the review status, they received only the same evasive reply. Through industry contacts, Mr. Wang learned that hundreds of similar quant teams had filed appeals, yet only a few with significant industry influence received minimal compensation, while the vast majority were effectively ignored.

Even more infuriating, Binance’s subsequent technical report explicitly acknowledged API interface anomalies, system lag, and degraded performance in the asset transfer subsystem—but failed to include losses caused by these issues in the compensation scope. This self-contradictory approach fully reveals Binance’s intent to evade responsibility.

Controversy Two: Opaque Compensation Criteria, Disproportionate Payouts with No Clear Basis

Binance’s compensation mechanism lacks any publicly available standards or calculation formulas. Users cannot determine what compensation they deserve. Identical losses and identical causes result in payouts differing by up to tenfold, sparking widespread outrage among affected users. Payout amounts appear entirely arbitrary, determined solely by Binance’s subjective discretion.

Real Case 1: Ms. Li ($1.2M loss) vs. Mr. Liu ($1.18M loss) — Same loss amount, 10x difference in compensation ratio

Ms. Li and Mr. Liu are both regular Binance users. On October 11, both experienced contract liquidation due to USDe de-pegging. Ms. Li lost $1.2M, Mr. Liu lost $1.18M—nearly identical circumstances and losses.

After submitting appeals, Ms. Li’s claim was approved, receiving $120K compensation (10% payout ratio). Mr. Liu, despite providing complete evidence, received only $12K (1% payout ratio)—a tenfold difference.

Both asked customer service for clarification, but received no rational explanation, only: “Payout amount is determined by platform assessment based on account status and trading history, with no fixed standard, and results are final.” Mr. Liu later discovered that compensation ratios correlate with trading frequency, volume, and user tier—high-volume, high-frequency, and premium-tier users receive higher ratios, while retail investors face discrimination with disproportionately low or zero compensation.

Real Case 2: Mr. Wang ($4M loss, VIP3 User) — Only 0.75% payout, same as regular users

Mr. Wang, a former Binance VIP3 user (812.eth), suffered a $4M loss, part of which was linked to WBETH de-pegging—qualifying him for compensation. After submitting his appeal, Binance approved it and awarded just $30K—only 0.75% of his loss—identical to the ratio given to ordinary users. This starkly contradicts his VIP3 status, cumulative trading volume of $100M, and $1M in fees paid.

When Mr. Wang contacted his dedicated support team to question this, the response was: “Payouts are uniformly determined, independent of user tier.” However, he later learned that another Binance VIP2 user, losing $1M due to USDe de-pegging, received $200K (20% payout ratio)—over 26 times higher than his own.

“Binance advertises VIP privileges, but in compensation, there’s no distinction—worse than regular users. This is outright deception,” Mr. Wang angrily stated. He emphasized that Binance’s compensation criteria lack fairness entirely, driven purely by platform subjectivity, disregarding actual losses and long-term user loyalty.

Controversy Three: Burdensome Liability Waivers Attached to Compensation—“Small Payout for Full Liability Release,” Rife with Traps

When offering compensation, Binance forces users to sign harsh liability waivers. Core clauses state: “Upon receiving compensation, users must irrevocably waive all legal claims, may not sue, arbitrate, report, disclose information to third parties, or criticize Binance; otherwise, Binance reserves the right to reclaim the compensation.” This “small payout for total liability release” strategy effectively strips users of their right to seek redress and reduces Binance’s legal exposure.

Real Case 1: Mr. Zhao ($6.5M loss) — Refused to sign waiver; compensation canceled; appeal blocked

Mr. Zhao, a small institutional head (previously mentioned), had $500K of his $6.5M loss tied to USDe de-pegging—eligible for compensation. After submission, Binance approved a $30K payout (just 0.46% of actual loss), but demanded signing a liability waiver.

The agreement clearly stated: “$30K is final compensation. Users must relinquish all claims, may not litigate, report, disclose terms or losses, or criticize Binance; otherwise, Binance may reclaim payment and deduct from user accounts.” Mr. Zhao found the payout too low and the terms overly harsh, so he refused to sign.

Immediately, Binance revoked his compensation eligibility, changing his status to “failed review.” Multiple attempts to challenge via customer service yielded only: “This is platform policy; refusal to sign cancels compensation.” After consulting a lawyer, Mr. Zhao learned the liability waiver constitutes an invalid standard clause and plans to pursue legal action, refusing to accept Binance’s unreasonable demands.

Real Case 2: Ms. Chen ($800K loss) — Signed waiver, later discovered unfair treatment; now powerless to act

Ms. Chen, a retail investor, lost $800K due to WBETH de-pegging. After filing an appeal, Binance agreed to pay $40K (5% payout ratio). Urgently seeking partial recovery, she signed the waiver without thoroughly reviewing the terms.

After signing, she discovered in a victim advocacy group that another user with nearly identical loss ($700K) received $140K (20% payout ratio)—four times her amount. She tried contacting customer service to question the disparity and request higher compensation, but was told: “You’ve signed the waiver; payout result is final and no further appeals or actions are allowed.”

Only then did Ms. Chen realize the trap. But having already signed, she can no longer claim redress. Customer service explicitly warned: “If you continue appealing or exposing the matter, Binance will reclaim your $40K payout and pursue breach-of-contract liability.” “I acted out of desperation and signed without reading—now I know it’s unfair, but I have to swallow the loss. Binance is literally digging a pit to trap users into giving up their rights,” she lamented.

Controversy Four: Payouts Ridiculously Small, Vastly Inadequate Compared to Actual Losses—Superficial Effort

Binance’s $283 million compensation fund appears substantial, but when distributed across hundreds of thousands of affected users, it amounts to mere drops in the ocean—most users receive less than 10% of their actual losses. Some users losing millions received only thousands, others nothing at all—completely mismatched with Binance’s profitability and victims’ real losses.

Real Case 1: Mr. Zhou ($3.2M loss) — Received only $20K, less than 0.6% compensation

Mr. Zhou, a seasoned retail trader specializing in BTC futures, lost $3.2M on October 11 due to Binance system latency and stop-loss failure. Of this, $200K was linked to USDe de-pegging—eligible for compensation.

After submitting his appeal and signing the liability waiver, he received only $20K—less than 0.6% of his loss. “A $3.2M loss, Binance pays $20K—barely a fraction. This isn’t compensation—it’s a mockery,” Mr. Zhou raged. He noted that Binance’s single-day outflow reached $3.4B, proving it could afford far broader compensation but deliberately minimized payouts, ignoring massive user losses.

Mr. Zhou emphasized that his $3.2M loss represented years of savings. Now wiped out overnight, his life is in crisis. Binance’s token compensation has only worsened his plight. “Even if I sign the waiver, I’ll keep exposing Binance’s conduct. Even if I can’t win legally, I’ll make sure others know Binance’s true face to prevent further victims.”

Real Case 2: A Small Investment Firm ($15M loss) — Received only $500K, 3.3% compensation

A small crypto investment firm managing $20M in assets suffered a $15M abnormal liquidation on October 11 due to Binance system failures and price deviation. Of this, $1M was linked to WBETH de-pegging—eligible for compensation.

After submitting all evidence and signing the waiver, the firm received only $500K—just 3.3% of its loss. The firm’s director stated: “A $15M loss brought us to the brink of bankruptcy. $500K won’t ease our financial strain or allow us to explain to investors.”

“As the world’s largest crypto exchange, Binance earns hundreds of billions annually. Yet it offers only $283M in token compensation—ridiculously low. This is indifference toward users and evasion of responsibility,” the director said. The firm plans to join other affected institutions in challenging the unfair waiver terms and pursuing regulatory complaints and legal remedies.

Controversy Five: Discriminatory Treatment—Private Full Reimbursement for KOLs, Nothing for Ordinary Users

Multiple users have reported that Binance engaged in severe discrimination during compensation: offering private full reimbursement plus strict non-disclosure agreements to influential KOLs and signal providers to silence them, while deliberately minimizing payouts or ignoring ordinary users and small retail investors, rendering fairness meaningless.

Real Case 1: A Crypto KOL ($800K loss) — Private full reimbursement with confidentiality agreement

An anonymous crypto KOL with 500K followers suffered an $800K loss on October 11 due to Binance system failure, most of which stemmed from USDe and WBETH de-pegging.

After liquidation, Binance staff proactively contacted the KOL, proposing “full reimbursement of $800K,” but requiring a strict confidentiality agreement. The agreement stipulated: “No disclosure to any third party regarding compensation, personal losses, or Binance system issues; no negative remarks about Binance; failure to comply requires repayment of full compensation and indemnification for reputational damages.”

In an anonymous post in a victim forum, the KOL revealed: “Binance contacted me privately, reimbursed my entire loss, and demanded I stay silent. They even promised future traffic support.” He added: “I know many other KOLs received private payouts from Binance. They’re trying to buy silence, suppress exposure, and hide their incompetence.”

Real Case 2: Ms. Wu ($500K loss) — Same cause and loss as KOL, received nothing

Ms. Wu, a regular retail investor, suffered nearly identical losses ($500K) due to USDe and WBETH de-pegging—same cause and scale as the aforementioned KOL. After submitting her appeal, Binance rejected it, stating: “Losses fall under market risk, not within compensation scope.”

After learning the KOL received full reimbursement, Ms. Wu contacted customer service multiple times, asking: “Why can KOLs get full compensation while I get nothing?” But customer service only replied: “We do not have details; compensation decisions are based on platform review,” refusing any rational explanation.

“Binance is blatantly biased—kowtowing to high-traffic KOLs with full reimbursement, while treating ordinary users with cold indifference, awarding nothing. This is not how a top-tier platform should behave,” Ms. Wu said. She has collected the KOL’s testimony and her own evidence, preparing to file formal complaints with regulators against Binance’s discriminatory practices and continue fighting for justice.

Controversy Six: Customer Service Evades Responsibility, Appeals Take Forever, Most Users Receive No Response

Slow response times and evasive customer service are a shared pain point among affected users—most submissions go unanswered for extended periods. When users inquire, they receive only the canned reply: “Please wait patiently.” Some have waited months with no update, leaving them with no recourse.

Real Case 1: Mr. Zheng ($1.2M loss) — Submitted appeal 3 months ago, no response

Mr. Zheng, a retail investor, lost $1.2M on October 11 due to Binance system latency and stop-loss failure, with $150K tied to USDe de-pegging—eligible for compensation. He submitted his appeal on October 12. Three months later, he has received no review result or response whatsoever.

During this period, he called customer service dozens of times to get through, only to hear: “Under review, please wait patiently”—no progress updates, no timeline. “Three months with no news—Binance is clearly dragging things out to make us give up,” Mr. Zheng sighed. He has lost faith in Binance and now plans to join other victims in reporting to regulators for help.

Real Case 2: Mr. Feng ($850K loss) — Appeal rejected with no reason provided

Mr. Feng, a veteran trader, lost $850K on October 11 due to Binance oracle failure and price deviation, with $250K tied to WBETH de-pegging—eligible for compensation. After waiting over a month, he received only a “review failed” notification—with no explanation or reasoning.

When he contacted customer service to ask why, they only said: “After platform review, your case does not meet compensation criteria,” refusing to provide any detail or basis. “They reject my appeal without telling me why—that’s abuse of review power. They just want to brush me off and dodge responsibility,” Mr. Feng declared. He will resubmit his appeal and file formal complaints with regulators, vowing not to give up despite the difficulty.

In summary, Binance’s $283 million compensation initiative is fundamentally a public relations stunt—a bandage covering up its negligence. The scope is narrow, standards are opaque, terms are punitive, amounts are trivial, treatment is discriminatory, and customer service is obstructive. Every controversy points directly to Binance’s irresponsibility and insincerity.

As a global leader in cryptocurrency exchanges, Binance should uphold its core duty to ensure platform stability and protect user rights. Instead, after causing massive user losses due to system failures, it used various tactics to evade accountability and dismiss victims, ignoring the tearful pleas of hundreds of thousands. This is precisely the core purpose of this investigation—to expose the injustice and traps embedded in Binance’s compensation, unite all affected users, force Binance to acknowledge its responsibilities, expand the compensation scope, clarify the criteria, eliminate oppressive terms, and deliver fair restitution—so every harmed user receives justice.