In its November 2 update, Binance said users could verify a backing ratio of at least 1:1 for Bitcoin using the October 31 snapshot taken at 00:00 UTC. The exchange stated that only excess futures insurance reserves were reallocated following its security incident, and the disclosure did not establish a higher probability of Auto-Deleveraging. Its rules allow a profitable futures position opposing an insolvent position to be reduced even when it hedges a Bitcoin holding. Halving a 1 BTC futures short against a 1 BTC holding would leave 0.5 BTC of offset and expose the trader to an additional $5,000 loss if Bitcoin then fell by $10,000. Eligible Delta Neutral accounts receive lower reduction priority within their profit-and-loss category, but they are not exempt from Auto-Deleveraging.
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