Changpeng Zhao, widely known as CZ, dismissed claims that Binance played a central role in the largest liquidation event in crypto market history, an episode that wiped out around $19 billion in leveraged positions last October.
Key points to remember:
- CZ dismissed claims that Binance triggered the $19 billion crypto liquidation on October 10.
- He said he was speaking as a shareholder and not as an executive of Binance.
- A brief USDe drawdown on Binance was later blamed on an internal oracle issue.
Zhao responded to these claims during a Q&A session on Binance’s social media channels, pushing back against suggestions that the exchange was responsible for the October 10 sell-off.
According to Bloomberg, Zhao called the accusations “far-fetched” and said some market participants were wrongly blaming Binance for losses suffered during the crash.
CZ rejects claims Binance caused October 10 crypto crash
“There is a larger group that claims the October 10 crash was caused by Binance and wants Binance to make up for everything,” Zhao said, rejecting the idea that the exchange triggered the liquidation cascade.
He stressed that he was speaking as a shareholder and user of the platform, and not as a manager.
Zhao resigned as Binance CEO in November 2023 after pleading guilty to US federal charges related to anti-money laundering violations.
He later served a prison sentence but was pardoned by US President Donald Trump in October last year.
Although he no longer runs the exchange, Zhao remains a prominent figure in the industry and now oversees YZi Labs, an investment firm that spun off from Binance’s former venture arm and manages about $10 billion in assets.
Binance came under particular scrutiny during the October unrest after Ethena’s USDe stablecoin briefly lost its dollar peg on the exchange.
During the sell-off, USDe fell as low as $0.65 on Binance before recovering. The incident was later linked to a platform-specific oracle issue rather than a broader issue with the stablecoin.
Ethena founder Guy Young said at the time that the price disruption was confined to a single trading platform that relied on its own order book rather than deeper liquidity pools.
He added that temporary deposit and withdrawal problems prevented arbitrage traders from correcting the imbalance. Binance subsequently compensated affected users approximately $283 million.
$1 Billion Crypto Wipe Reignites Debate Over Leverage and Risk
More than three months later, the market is still feeling the aftershocks. Bitcoin, which was trading above $126,000 in early October, fell below $80,000 a few weeks later, taking the entire market with it.
The correction wiped out more than $1 trillion in total crypto market value, fueling the ongoing debate over leverage, risk management and the role of major exchanges during periods of extreme volatility.
According to Samer Hasn, an analyst at XS.com, the Federal Reserve’s neutral or hawkish stance, combined with tensions in the Middle East, has reduced demand for speculative investments in crypto markets.
Meanwhile, Matt Hougan, Bitwise’s chief investment officer, said gold’s rise beyond $5,000 an ounce and growing uncertainty around U.S. crypto legislation are shaping a critical moment for digital asset markets.
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