Decentralized derivatives platform edgeX has released a detailed incident report on the dramatic collapse of its native EDGE token, claiming the June 2 crash resulted from a coordinated market attack rather than any misconduct by the project team.
The report follows EDGE plunging from roughly $1.26 to as low as $0.31, a decline of nearly 77% that wiped out more than $220 million in market value and triggered widespread scrutiny across the crypto industry.
The incident also drew attention from on-chain investigator ZachXBT, who publicly questioned the circumstances surrounding the crash and called for greater transparency from the project team regarding liquidity conditions, token movements, and market-making arrangements.
What sparked the 60-second flash crash
According to edgeX’s internal data, the sharp decline began during a low-liquidity trading window in the early hours of June 2.
The exchange said its primary PancakeSwap liquidity pool held approximately $1.25 million in active liquidity at the time of the attack. Within a single minute, 174 addresses reportedly executed coordinated sell orders, causing sell volume to surge nearly tenfold and pushing the token price down by 23% almost immediately.
From there, the selloff spread across centralized exchanges and derivatives markets. “Given long positions in perpetual contracts were heavily crowded, the sudden and drastic price drop led to long liquidations, panic selling, and a cascading chain reaction,” edgeX said in its report.
The company estimated that combined sales volume across Binance, OKX, Bybit, and edgeX perpetual markets exceeded $140 million within an hour.
edgeX rejects manipulation allegations
Addressing speculation that insiders may have contributed to the crash, edgeX said its team wallets remained unchanged throughout the incident and that investigations conducted with multiple centralized exchanges found no evidence of team selling.
“We want to state this clearly and on record: edgeX had no involvement in this incident. Our team’s token allocations remained entirely unchanged throughout the event, and this is publicly verifiable on-chain,” the statement read.
According to edgeX, preliminary reviews from exchanges including OKX, Bybit, Bitget, and Bithumb concluded that the event was driven by liquidity conditions and liquidation cascades rather than organized manipulation by the project team.
The company also said its market-making partners are conducting independent forensic investigations.
200,000 USDC bounty and trader compensation
As part of its ongoing investigation, edgeX announced a 200,000 USDC on-chain bounty for information leading to the identification of the wallets or entities responsible for initiating the attack.
The exchange added that it is working to strengthen liquidity by onboarding additional market makers and liquidity providers to reduce the risk of similar incidents in the future. “This incident exposed the risks that come with thin market liquidity,” edgeX said.
Alongside the investigation, edgeX introduced a goodwill compensation program for users whose EDGE long positions were liquidated during the crash. Users who incurred realized losses between 04:50 and 06:00 UTC+8 on June 2 will be eligible for reimbursement of losses, capped at 100,000 USDC per account.
The compensation will be distributed in two phases:
- 50% of verified losses settled directly in USDC within seven days of claim validation.
- 50% paid in EDGE tokens during the first week of April 2027, calculated using a transparent seven-day time-weighted average price (TWAP).
The company emphasized that the payments are voluntary and do not represent an admission of liability.
Protocol remains operational
Despite the severe market volatility, edgeX stressed that the incident only affected the EDGE token price and did not compromise the trading platform or user funds.
“The edgeX protocol itself remained fully operational throughout the incident, and all user assets were secure at all times,” the company said.
While edgeX maintains that the crash resulted from an external attack, scrutiny from market participants and investigators continues as the broader crypto community awaits further forensic findings.
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