- Adjustments in leverage limits for the ACT token by Binance resulted in a significant 50% price drop and triggered forced liquidations.
- Over $1 million worth of ACT tokens was offloaded by three VIP traders and one retail trader, worsening the sell-off.
- To mitigate further risks, Binance lowered the leverage on ACTUSDT futures, but due to the token’s full circulation, they cannot halt trading.
On Tuesday, the price of the ACT The Prophecy (ACT) token experienced a steep decline of more than 50% during intraday trading, attributed to Binance’s adjustment in leverage position limits. This change impacted both the futures and spot markets, leading to cascading liquidations on Wednesday.
ACT token traders suffer $5 million losses as Binance modifies leverage limit
Reports reveal that three VIP users sold around $514,000 worth of ACT tokens, while a retail trader unloaded $540,000. This combined sell-off caused an immediate price discrepancy between the futures and spot markets.
ACT token traders recorded significant losses on Wednesday, April 2, 2025
The subsequent mass liquidation disrupted the market’s stability, prompting Binance to take action.
As of the latest data, traders dealing in ACT tokens have reported losses totaling $5.9 million in the past 24 hours, with a corresponding 37% decline on the daily price chart.
Even with this drastic decrease, Binance has confirmed that no individual entities gained significantly from the situation, although worries about potential market manipulation persist.
Analyzing the implications of ACT’s price volatility
This unforeseen wave of liquidations has reignited discourse regarding the effects of leverage adjustments on market stability. The situation emphasizes the significant influence of exchange policies on investor sentiment.
Market participants have expressed concerns surrounding the transparency of Binance’s risk management strategies and are advocating for better communication to prevent similar incidents going forward.
Benson Sun, a prominent cryptocurrency commentator, highlighted the necessity of clear communication between exchanges and traders. He stressed that Binance should have alerted stakeholders regarding such impactful changes prior to implementation to help diminish risks.
“Binance should notify stakeholders about significant changes to reduce market disruptions.”
– Benson Sun
Regulatory authorities may scrutinize Binance’s actions more closely, potentially affecting future regulations regarding leverage trading within the cryptocurrency market.
Binance’s investigation into the ACT token sales: Findings revealed
In the aftermath of the drastic price drop, Binance initiated an internal probe into the matter.
The investigation identified four users, including three VIP traders, who collectively sold over $1.05 million in ACT tokens on the spot market.
This mass sell-off prompted futures liquidations and impacted various low-market-cap tokens.
As a protective measure, Binance has reduced the leverage on ACTUSDT futures to prevent similar volatility issues from occurring again.
However, with ACT tokens already fully circulated, Binance indicated that it cannot impose any trading restrictions on the asset.
The exchange continues to monitor trading activity closely and has advised traders to exercise caution when utilizing leverage.
Market response and the current status of ACT
This incident underscores the risks associated with highly leveraged trading on low-cap meme tokens.
As Binance pursues its investigation, traders remain vigilant, observing potential regulatory consequences and possible future adjustments in leverage policies.
The ACT token is currently trading at $0.56, reflecting a 35.9% decrease over the past 24 hours.
Price action of the ACT token on April 2, 2025
According to market data, ACT’s market capitalization is currently $53 million, reflecting nearly a 95% decrease from its all-time high of $811 million recorded in November 2025.