CZ Rejects Claims Binance Sparked Crypto Crash With $1B Bitcoin Dump

TLDR

• CZ denied Binance dumped $1B in BTC to cause the crypto market drop.
• Binance’s SAFU fund will shift to BTC over 30 days, says CZ.
• CZ says Binance wallet changes reflect user withdrawals, not internal sales.
• Crypto crash blame includes Binance’s role in the October flash crash.

Binance co-founder Changpeng “CZ” Zhao has publicly responded to accusations suggesting Binance played a role in the recent cryptocurrency market drop. On Monday, Zhao addressed multiple claims that he called “imaginative FUD,” defending both his statements and the platform’s recent activity.

The term FUD, short for “fear, uncertainty, and doubt,” is commonly used in crypto to describe negative rumors or misinformation. CZ’s comments come amid renewed scrutiny following the sharp sell-off in crypto prices and market volatility over the weekend.

CZ Denies Binance Triggered the Sell-Off

In a detailed post on social platform X, CZ rejected claims that Binance sold $1 billion worth of bitcoin to cause the weekend drop in crypto prices. He said the funds in question were user-owned and not Binance’s holdings.

“Binance’s wallet balance only changes when users withdraw,” CZ wrote. “Most users keep their balance with Binance and use Binance as a wallet.”

He also addressed accusations that he alone influenced market sentiment when he said he was “less confident” about the so-called crypto supercycle. Critics suggested this remark contributed to bearish sentiment. CZ dismissed the idea, adding, “If I had that power, I wouldn’t be on Crypto Twitter with you lot.”

SAFU Conversion Plan Defended

Last week, Binance announced it would convert its $1 billion Secure Asset Fund for Users (SAFU) from stablecoins to bitcoin. Critics questioned the timing of the move and raised doubts about whether it added pressure to the market.

CZ explained the purchases would be made over 30 days and not in one transaction. He said Binance, being a centralized exchange with high liquidity, would not use decentralized exchanges for the conversions.

“You won’t see them buying using a DEX,” CZ wrote. “Binance is a CEX with the best liquidity in the world.”

The SAFU fund is designed as a user protection measure and is financed by Binance itself. It was introduced in 2018 to safeguard users’ assets in emergency situations.

Ongoing Tensions Over Flash Crash

CZ’s response follows rising tensions in the crypto community over the causes of the October 10 flash crash. The crash caused an estimated $19 billion in leveraged positions to be wiped out within minutes, triggering broader market disruption.

Rival exchange OKX’s founder, Star Xu, directly blamed Binance for the event. CZ did not address the flash crash in detail in his latest post but emphasized that users are responsible for their trading behavior, not the exchange itself.

He also pointed out that Binance has continued normal operations and that no internal market manipulation took place. Zhao stepped down as Binance CEO in 2023 after a legal settlement with U.S. authorities but remains a visible figure in the crypto space.

Market Confidence and Scrutiny

As the crypto market remains unstable, scrutiny on leading exchanges like Binance continues. Analysts and investors are watching major platform movements for any signs of manipulation or lack of transparency.

CZ’s attempt to clear the air may not settle all concerns, but it underscores the pressure faced by crypto leaders during market downturns. The blame over volatility has intensified across social platforms, even as facts remain unclear.

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