Binance Faces Challenges Amid Outages and Token Volatility
Binance, the world’s largest crypto exchange, has encountered notable hurdles this April. Two major incidents have raised questions about its operational stability.
On April 15, an amazon Web Services (AWS) outage disrupted Binance’s systems in the AP-NORTHEAST-1 region, affecting japan and Korea. This led too temporary suspension of crypto withdrawals. just two days earlier, the Mantra (OM) token experienced a severe price crash, losing over $5.5 billion in value within an hour. Binance, a major trading platform for OM, faced allegations of forced liquidations and unusual token activity. Though, Binance denied any wrongdoing.
These events come as Binance battles legal and regulatory pressures. It is indeed currently involved in an $81.5 billion lawsuit in Nigeria and is under investigation by the U.S. Securities and Exchange Commission.
the AWS outage began at 1:15 a.m. PDT on April 15 due to a power failure. This affected 12 critical AWS services, causing disruptions for Binance and other exchanges. Binance suspended withdrawals as a precaution and gradually resumed services by 8:16 a.m. UTC. However, users reported ongoing issues like slow performance and failed trades.
Dr. Max li, CEO of OORT, highlighted the risks of centralized cloud infrastructure. “AWS’s outage is a reminder of the need for more distributed and resilient models,” he said.
The mantra crash has sparked speculation about market manipulation. Some investors believe market makers inflated the price before exiting, leaving retail investors at a loss.
OM Token Crash Sparks Debate on Market Manipulation
The OM token, linked to the Mantra project, experienced a dramatic price drop, raising questions about market manipulation. some crypto experts believe this was a planned “pump and dump” scheme.
Leonidas, a crypto commentator, accused Binance of promoting OM to build retail hype.He claimed that once the price surged, insiders offloaded their tokens, causing the crash. John Mullin, Mantra’s co-founder, disagreed, blaming forced closures by centralized exchanges during a period of low liquidity.
Binance offered its own explanation, citing cross-exchange liquidations as the main cause. The exchange noted it had reduced leverage limits for OM in October 2024 to manage risks.On-chain data showed large OM deposits to Binance and OKX before the crash, raising suspicions of purposeful dumping.
- OM price dropped from $6B to $400M in under 3 hours.
- 17 wallets deposited over 43 million OM tokens to exchanges before the crash.
- Binance warned users about OM’s tokenomics in January 2025.
While the debate continues, the incident highlights vulnerabilities in the crypto ecosystem. Binance faces additional challenges, including an $81.5 billion lawsuit in Nigeria over unregistered operations and tax evasion allegations.
Binance’s Significant Presence in Nigeria Sparks Regulatory Concerns
In 2023,Binance reported over 386,000 active users in Nigeria. These users traded a massive $21.6 billion,generating $35.4 million in net income. This activity highlights Binance’s substantial economic impact in the country.
However, authorities argue that this footprint necessitates compliance with local financial rules.Binance, however, claims Nigeria isn’t a key market and questions the accuracy of these figures. The exchange stopped naira transactions in March 2024, denying any role in currency instability.
No Binance executives are expected in court. Yet, former regional manager Nadeem Anjarwalla, who left Nigeria in 2024, faces trial in absentia.A conviction could lead to hefty fines for Binance and jail time for Anjarwalla.
Binance has also tried to dismiss the case due to a spelling error in court documents, but this hasn’t halted proceedings.
Meanwhile, Binance faces ongoing regulatory issues in the U.S. In June 2023, the SEC charged the company with 13 counts, including operating unregistered exchanges. The case was paused in February 2025 for a crypto task force review, with no resolution yet.
These challenges come after Binance’s $4.3 billion settlement with U.S. authorities in November 2023 for anti-money laundering violations. This settlement damaged Binance’s global reputation.
These legal battles aren’t just isolated incidents. They represent deep structural and legal challenges Binance must address in major markets to ensure long-term stability.
