Crypto lending witnessed a significant surge during the third quarter of 2025, reaching a record high of $73.59 billion, according to Galaxy. This growth was fueled by a particularly strong increase in DeFi lending, which climbed by $14.52 billion to reach $40.99 billion. A key factor driving this surge is the growing utilization of crypto leverage through futures open interest, which reached a peak of $220.37 billion before October’s market crash. This crash led to the largest single-day liquidation event in history, exceeding $17 billion on October 10th and impacting major exchanges such as Binance, Bybit, and Hyperliquid. The swift market reaction highlights vulnerabilities within the crypto ecosystem and raises concerns about investor protection. While responses from industry leaders and regulatory bodies remain unclear, Richard Teng, CEO of Binance, acknowledged the volatility inherent in crypto derivatives and called for greater focus on risk management during trading.