Changpeng Zhao, co-founder of Binance, recently addressed a wave of allegations regarding the exchange”s role in the October crypto price drop. In a post on social media, Zhao described these claims as “pretty imaginative FUD,” referring to the term used to denote “fear, uncertainty, and doubt” in the cryptocurrency space.
The accusations suggest that Binance may have intentionally sold off bitcoin to instigate a selloff that drove prices below $75,000. Zhao responded to these rumors by clarifying that any changes in Binance”s wallet balance are a direct result of user withdrawals, stating, “Binance”s wallet balance only changes when users withdraw.” He emphasized that most users keep their funds on the platform and utilize it like a wallet.
Concerns have also emerged about Binance”s handling of its Secure Asset Fund for Users (SAFU). Zhao explained that the company”s strategy for converting this fund from stablecoins to bitcoin would be executed gradually over 30 days, indicating that these purchases would not be made through decentralized exchanges (DEXs) but rather with Binance”s superior liquidity as a centralized exchange (CEX).
In response to criticisms that he was responsible for “cancelling the supercycle,” Zhao jokingly remarked that if he had such power, he would not be engaging with users on social media. He noted that his earlier comments expressing diminished confidence in the supercycle thesis were misinterpreted, adding, “That”s all I said.” This statement reflects his perspective that market dynamics are influenced by a variety of factors beyond any single individual”s control.
The backdrop of Zhao”s defense comes amid ongoing scrutiny following the October 10 flash crash, which resulted in significant losses across the market, wiping out approximately $19 billion in leveraged positions. This event has led some members of the crypto community, including Star Xu, founder of rival exchange OKX, to publicly attribute blame to Binance.
Despite stepping down as Binance CEO in 2023 after a $4.3 billion settlement with U.S. regulators and serving a four-month prison sentence, Zhao remains an influential figure in the cryptocurrency landscape. As the narrative surrounding Binance continues to evolve, Zhao”s remarks highlight the delicate balance between market perception and the realities of crypto trading.
