- On April 1, 2025, several altcoins experienced significant price slippage.
- Changes to the margin requirements of the Binance exchange were the trigger for large-scale volatility.
- Wintermute has been at the center of suspicions of market manipulation, though company representatives have denied the allegations.
On April 1, 2025, the altcoin sector faced a sudden collapse of more than a dozen assets. For example, the Act I token The AI Prophecy (ACT) lost over 50% of its value, while DeXe (DEXE) and dForce (DF) fell 30% and 20%, respectively.
The situation excited the community, and some experts predicted that a major market maker was involved in the incident. In particular, suspicion fell on Wintermute, which users believe may have deliberately manipulated the market or been hacked.
The Coinpaper team looked into the situation and found out the true reasons for the April 1 collapse in the altcoin segment.
Panic on the ship
It all started when traders noticed a sharp drop in the quotes of some assets on the Binance exchange on April 1. The aforementioned ACT collapsed from $0.19 to $0.058 in less than an hour, resulting in a $91.8 million drop in market capitalization, according to CoinMarketCap.
Similar processes were observed in the quotes of other altcoins, among which:
- DEXE - 30%;
- DF - 20%;
- HIPPO - 41%;
- KAVA, 11.5%;
- BANANAS31 - 11%;
- LUMIA - 12.2%.
Several other assets, such as TST and QUICK, also registered a noticeable drawdown. This left the community puzzled, as no one could understand the reason for what was happening.
Analyzing the situation, users assumed that a large market maker and liquidity provider for exchanges was involved in the problem. And soon a candidate for the role of "evil master" was found - Wintermute.
Guiltless
One of the first to point out the possible involvement of the said company in the incident was a user under the nickname 0xDepressionn. He noted that Wintermute started actively withdrawing liquidity from the markets where it is a market maker.
This information was also confirmed by some other users. As arguments, they referred to the Arkham Intelligence platform data.
There was speculation on social network X (formerly Twitter) that the company may have liquidated positions in several altcoins. This, according to some traders, increased volatility and led to panic selling.
Trying to understand why a major market maker might need such a move, part of the community assumed that it had been hacked. In that case, the active sale from Wintermute wallets seemed natural, as hackers often transfer stolen assets into Ethereum or bitcoin.
Other users suggested that the company may be locking in profits or simply moving liquidity into other assets. Meanwhile, many reacted strongly negatively, posting angry comments online and calling for the Wintermute team to be held accountable.
One theory even stated that the firm had previously interacted with World Liberty Financial's USD1 stablecoin and this may have affected their portfolio structure. Allegedly, the market maker was reallocating assets in favor of the "stablecoin" from Donald Trump's family.
However, soon the head of Wintermute Eugene Gaevoy reacted to the situation. He denied the accusations and said that the company was not involved in the incident.
Gaevoy's words did not have an immediate effect, as the idea was actively promoted in the community, as if the developers to the detriment of users realize a "secret plan".
The fact is that Wintermute is a liquidity provider for exchanges, including Binance. The company was already accused of market manipulation in February 2025 after significant movements in bitcoin and Ethereum prices.
Under the circumstances, users considered versions with hacking, system error or purposeful harm to the market to be the most likely.
All the strings lead to Binance
As events unfolded, it became clear that the epicenter of the collapse was Binance, the largest crypto exchange by trading volume. Order data from the order book showed that the majority of sales came from here. This raised questions in the community about the company's role in what was happening.
Some users predicted that Binance could have been either a victim of Wintermute's manipulations or was itself involved in liquidation-related operations.
The reality turned out to be more prosaic.
According to the information published by the exchange's team, from April 1, 2025, the platform raised the minimum margin on a number of altcoins, motivating the decision by "adapting risk management to current market conditions." As a result, position limits and maximum leverage were reduced.
This decision, according to analyst under the nickname 0xG00gly, was a direct catalyst for the events. Higher margin requirements forced traders to either quickly increase the collateralization of their positions or face forced closure. With limited time and the inability to quickly replenish accounts, many positions began to be automatically liquidated.
According to Lookonchain, this is how one of ACT's whales faced the closure of a $3.79 million position. A number of other users related to the tokens listed earlier were similarly affected.
Binance officials noted that the drop was amplified by massive spot market sales. According to a statement from the team, three large VIP clients of the exchange sold ACT for about 514,000 USDT, while one retail investor transferred a large volume of the asset into the account before selling all tokens for 540,000 USDT.
The situation was exacerbated by mass panic amid the sharp decline in rates. Binance, despite attempts to stabilize the situation through additional comments, became the object of criticism from traders and analysts;
Note that many affected altcoins continued to fall the next day - April 2. For example, the rate of ACT at the time of preparation of the material fell to $0.053, and its market capitalization decreased to $54.2 million. In the case of DF quotes fell to $0.046, and LUMIA is trading at $0.34.
Competitors, investigations, bottom line
The founder of the CoinKarma project under the nickname BensonTWN and user CnmdRain summarized, explaining exactly how Binance's decision regarding margin collateral led to panic in the market.
According to them, the reduction in position limits and maximum leverage restricted market makers who were actively supporting liquidity with them. Because of the new rules they had to reduce positions, which caused mass liquidation of contracts on "longs" and falling prices on the futures market.
The difference between spot and futures market prices increased dramatically, which attracted trading bots. They started actively selling tokens, using the difference in value for arbitrage. This increased pressure on the market and led to a decline in prices already on the spot market, exacerbating the overall decline.
The above-mentioned factors caused cascade fall. First, market makers liquidated positions, then bots increased pressure on the market, and finally panic among retail investors led to an even greater collapse;
Thus, according to the expert, this was not a planned action by Wintermute, but was the result of a change in Binance's trading rules.
The clarification of the situation led some users to apologize for the previously voiced claims against the market maker. For example, an analyst under the nickname beniduboss published a post publicly admitting his wrong doing.
Evgeny Gaevoy responded to the publication, thanking beniduboss for his words.
Representatives of Binance, in turn, announced that they are conducting an investigation regarding mass liquidations on the market. At the same time, the exchange is not going to abandon the new rules and insists on the need to implement them.
In addition, the platform urged market makers to take part in a "comprehensive program to increase market liquidity".
ACT token developers also released a statement to the community. They noted that despite the spike in volatility and subsequent collapse in value, the team continues to work and is focused on long-term development.
Wintermute's potential competitor in the form of market maker Vortex did not ignore the incident. Its representatives called for affected users to contact them to buy back assets.
DFW Labs co-founder Andrei Grachev also expressed his readiness to support the "dump victims." According to him, the firm also intends to allocate funds to buy back the tokens.
At the current stage, there are no specific statements regarding assistance to users affected by the volatility spike. Projects and companies affected by the incident have limited themselves to reports of investigations or non-involvement in the collapse.
However, some users and experts believe that what happened points to the problem of global influence of large players on the industry. In such circumstances, they believe that it is necessary to think about creating counterweights to balance the industry.
