Tom Lee: October 2023 crypto deleveraging surpassed FTX collapse, triggered by CEX pricing flaw

Tom Lee said during podcast "The Compound" on Feb. 1 that the current bear market was sparked by the largest deleveraging event in crypto history last October, which he believes exceeded the FTX collapse in scale, BlockBeats reports. He attributed the event to an automated cascade of liquidations triggered by a pricing flaw at a centralized exchange, saying more than 2 million accounts were liquidated, around one-third of market makers were wiped out and the platform's balance sheet was severely damaged. Lee added that selling pressure has not fully subsided and compared the situation to 2022, when recovery took 8–12 weeks, noting he has yet to see a clear rebound signal.