Binance CEO Changpeng ‘CZ’ Zhao has taken to Twitter to deny the accusation that the cryptocurrency exchange has been selling Bitcoin (BTC) and Binance Coin (BNB) at a dizzying pace.
One Crypto Twitter member identified as @JW100x propelled the discussion earlier by saying that Binance was selling spot BTC to defend the BNB $220 liquidation fall. However, CZ clarified that the exchange has not sold either BTC or BNB, adding that Binance still has a lot of FTX tokens (FTT).
BNB Declines Following SEC Lawsuit
The BNB began to experience significant decline after the United States Securities and Exchange Commission (SEC) indicted the crypto exchange last Monday. With this last week, BNB has dropped by more than 23% and at the time of the writing, the token was trading at $248.91, indicating a 5.98% jump within the last 24 hours.
JW100x claimed that Binance has been building reserves by swapping out BTC for Tether (USDT), buying BNB aggressively, and then trading BNB for Binance USD (BUSD) in an attempt to dampen BTC volatility. Finally, Binance pumped BUSD into BTC to suppress any downside volatility, allowing for an efficient BTC to USDT swap, according to JW100x.
Binance Accused of Wash Trading
Many other netizens got involved in the conversation with some agreeing to the fact that the succession of events happened to stop both BTC and BNB from crashing, indicating a form of market manipulation. Swan Bitcoin CEO Cory Klippsten also reiterated that Binance is involved in what he tagged “wash trading”.
Wash trading is a kind of market manipulation scheme where a trader puts out an asset for sale, then buys it after some time to suggest more activity in the marketplace or inflate the demand of the assets. With the current state of affairs, analyst Joe Consorti has requested that for this FUD to end, Binance would have to publish an audited statement clarifying that Binance has no BNB-collateralized liability.
SEC List BNB as Unregistered Securities
The leading cryptocurrency exchange has recently come under such intense scrutiny after it was charged by the SEC for listing registered securities. Some of the tokens mentioned in the lawsuits are BNB (BNB), Binance USD stablecoin (BUSD), Solana (SOL), Cardano (ADA), Polygon (MATIC), Filecoin (FIL), Cosmos Hub (ATOM), The Sandbox (SAND), Decentraland (MANA), Algorand (ALGO), Axie Infinity (AXS,) and Coti (COTI).
This is also a crucial time for CZ as the Binance community is already looking at making Richard Teng the new CEO.