ACT Token Plunges Amid Binance's Leverage Policy Change

Binance's leverage adjustments triggered cascading liquidations, leading to ACT's sharp price drop.

A token linked to an artificial intelligence project has seen better days.

Act I The AI Prophecy (ACT), a project focused on integrating artificial intelligence into decentralized ecosystems, released a post-mortem about the fall of their token on Wednesday.

The token saw a sharp decline on Tuesday, with its price falling 58% in less than an hour. The token went from $0.19 to $0.08, and saw its market capitalization shrink by $96 million, according to CoinGecko data.

The sharp decline came after Binance adjusted its leverage and margin tiers for several tokens, including ACT.

The adjustment also triggered a wave of liquidations, with blockchain analytics platform Lookonchain reporting that a whale was liquidated for $3.79 million at $0.1877.

The impact of these liquidations also brought heightened selling pressure across the market.

In response, Act I addressed its community, stating that the project was looking into the situation and working with the relevant parties before releasing a report.

According to the team, Binance’s adjustments to its leverage policy were announced with short notice, impacting traders and market makers with large positions, pushing them to close or downsize their positions, which in turn triggered cascading sell-offs.

Binance’s preliminary findings showed that four users, including three VIP traders and one non-VIP trader, sold a total of over $1 million worth of ACT on Binance’s spot market, which accelerated the token’s price decline.

Act I noted that no single party appears to have profited disproportionately from this sequence of trades.

The project also clarified that the full circulating supply of ACT is live on the open market, and once tokens are held in personal accounts on centralized exchanges like Binance, the project cannot restrict user behavior.

Despite the turbulence, Act I remains committed to its long-term mission of integrating artificial intelligence into decentralized ecosystems.

“Although we are unable to directly impact the price of the token, we remain focused on our core mission: to build real AI infrastructure for Web3,” the team said.

The project plans to present its developments at Token2049 later this month.

Act I recognized the frustration among its holders but remains focused on its goals.

“This incident, while difficult, does not change our fundamentals, our partnerships, or our long-term vision,” the statement read.

“If anything, it has made us double down on decentralization, transparency, and resilience.”

As the project works to regroup after this market event, the token continues to face pressure in the broader market.