A historic crypto crash triggered by tariffs on China has exposed vulnerabilities in exchanges like Binance, Bybit, and Hyperliquid. The unprecedented event saw billions of dollars in capital wiped out within 24 hours, according to data. This sudden market downturn, fueled by extreme leverage and token depegs like USDe and WBETH, prompted accusations of technical malfunctions and a lack of regulatory oversight from traders who experienced severe losses. Binance, the largest crypto exchange, announced paying $283 million in compensation to affected users following the incident. The exchange acknowledged technical flaws contributing to the crash, including outdated limit orders and display issues, which led to token price discrepancies. This event calls into question the role of exchanges in protecting user funds and ensuring market stability. Binance pledged measures like integrating buyback prices into benchmark indices and establishing a price floor for USDe, as well as reviewing their liquidation mechanisms. As crypto exchanges navigate this crisis, they face increasing pressure from regulators to enforce stricter rules and build trust with users.