Following the crash of its EDGE token, decentralized derivatives exchange edgeX, has shared an update stating that it will compensate users affected by the 70% crash.The exchange debunked the allegations that the crash came as a result of insider manipulation, maintaining that the price collapse resulted from external actors.edgeX posted what appears to be a refund commitment on X on June 3, following two earlier statements in which it blamed “deliberate” market-price manipulation by external actors for the sell-off, according to the project’s official account.However, blockchain investigator ZachXBT did not buy the exchange’s explanation, stating that concentrated insider ownership and a thin float better explain the collapse.What happened to EDGE?EDGE dropped from roughly $1.14 to a low of $0.366 during the June 1 session, a peak-to-trough decline of about 70%, according to CoinMarketCap data.edgeX’s own account of the timeline puts the sharpest move in the early hours of June 2 UTC, with EDGE falling from around $1.12 to approximately $0.32 within a single hour before stabilizing between $0.63 and $0.71.The crash triggered more than $2.81 million in liquidations within that window, with long positions accounting for $1.96 million and shorts roughly $849,000, per Cryptopolitan’s earlier reporting.As of June 3, EDGE was trading near $0.69 with a market capitalization of about $242 million and a circulating supply of 350 million tokens out of a 1 billion maximum, according to CoinMarketCap.What is edgeX’s response?In the early hours of June 2, edgeX ruled out any hack, exploit, or security breach while attributing the sell-off to deliberate manipulation by outside participants.edgeX also addressed community concerns about a smart contract address that users had flagged as suspicious, stating that it belonged to the exchange and was used solely for user deposits and withdrawals.On June 3, the exchange followed up with a refund announcement for affected users, calling it a goodwill payment that matches their actual losses. It stated that eligible users will receive the refund seven days after verification.However, it added that the refund is capped at a maximum of 100,000 USDC per individual user.What was ZachXBT and the community’s reaction to the initial token crash?ZachXBT responded to edgeX’s explanation on X by stating that “EDGE supply was being controlled by a few insiders with a low float,” and called on the project to name “the counterparties / MM agreements which lead to these events.”ZachXBT has a track record of flagging similar collapses. In April, ZachXBT investigated the RAVE token, where addresses linked to the initial distribution controlled around 95% of the supply before a crash exceeding 95% from peak.He connected that playbook to several other tokens, including RIVER, SIREN, MYX, and SKYAI. Analytics firm BubbleMaps also flagged SIREN’s concentrated ownership weeks before its market cap fell from $1.52 billion to $320 million.Community sentiment on edgeX’s posts was far from welcoming, with the initial post getting responses from users, with many accusing the team of involvement in the crash.edgeX has promised to share its core conclusions from the incident. ZachXBT has made clear he expects it to include names of counterparties and market-maker agreements, while EDGE holders and traders who took losses in the crash will be watching both the report and the refund mechanics closely.Don’t just read crypto news. Understand it. Subscribe to our newsletter. It's free.