Gold has repeatedly hit new highs, but PAXG has experienced a flash crash triggering $1.9 billion in liquidations? The community is calling for regulatory investigations.

On October 11, 2025, the “lightning crash” swept through the crypto market, with the gold-backed Token PAXG being the hardest hit, as its price plummeted 22% in an instant, triggering a liquidation wave of over $1.9 billion globally. This incident not only exposed the vulnerabilities in real-world asset (RWA) trading but also incited user outrage due to suspected interface malfunctions on the Binance platform, leading the community to call for regulatory intervention.

PAXG price flash dropped over 22%

On October 11, 2025, the price of PAXG (Pax Gold), which was originally stable and pegged to spot gold, suddenly fell from about $3,950 to $3,087 on the Binance platform, a drop of up to 22%. On the same day, its volatility reached as high as 31.65%, far exceeding the typical daily fluctuation range of around 2% for gold.

PAXG Binance Spot

It is currently the weekend, and the international gold market is closed. Typically, the PAXG price should remain stable, but the weak trading depth on Binance (with a daily trading volume below 10 million USD) has led to massive liquidations in leveraged trading positions.

( Binance compensates users over 280 million USD, clarifying that the decoupling is not the main reason for the market big dump )

Multiple users posted complaints on X (formerly Twitter) about their losses, including a trader named @ChaoAzen, who stated that his $10,000 position was completely liquidated within minutes without any warning.

The community is outraged: users are shouting for regulatory agencies to intervene.

The victim community did not sit idly by. A user named @Rocky_Bitcoin initiated a call on X, urging everyone to contact the regulatory authority of PAXG issuer Paxos — the New York State Department of Financial Services (NYDFS), providing contact information including phone and official email (subpoenas@paxos.com), hoping to encourage official intervention in the investigation of this matter.

In the comments section below the post, many users expressed serious dissatisfaction with the transparency of Binance and Paxos. @Maxandzero questioned: In the situation where the current price of gold has reached a historical high of $4,015 per ounce, why did PAXG fall by 31%? Is there any suspicion of manipulation?

The outside world once again recalls that Paxos was fined 500,000 USD by NYDFS in 2023 due to “weak risk control mechanisms,” raising doubts about whether it fulfilled its regulatory responsibilities during this crisis.

Gold surges vs. PAXG suffers heavy losses, RWA market risks come to the forefront

Despite spot gold reaching a historic high in October, many PAXG investors have exited due to this liquidation event and are unable to participate in this rebound.

This flash crash has also exposed the risks of the “real-world assets” (RWA) token market. Market experts and community opinion leaders are calling for regulatory agencies to strengthen regulations on the interaction between on-chain assets and centralized exchanges, and to improve platform operational transparency.

This article discusses how gold has repeatedly hit new highs, yet PAXG has experienced a flash crash triggering a $1.9 billion liquidation? The community calls for regulatory investigation, first appearing in Chain News ABMedia.