CZ Rejects Claims Linking Binance to Major Crypto Liquidation

Binance’s founder and ex-CEO Changpeng Zhao has pushed back strongly against talks against Binance on social media. 

Some traders are accusing the exchange of triggering the sell-off and carrying out forced liquidations in October 2025. However, Zhao, recently dismissed these allegations and said they did not match the facts.

Allegations Against Binance After Crypto Liquidation

On October 10, leveraged positions worth over $19 billion were wiped out as crypto prices fell sharply across the market. This event marked the largest liquidation event that happened in the crypto market history, with industry leaders calling for a probe. 

Following the sudden market downturn, several traders argued that Binance caused the crash and liquidated positions unfairly. They claimed the exchange should compensate users for the losses suffered during the crash. 

These accusations spread quickly across social media as fear and uncertainty grew in the market. Zhao responded during speaking sessions on Binance’s social media channels. 

He explained that the claims misunderstood how liquidations happen during periods of extreme leverage and volatility.  The industry leader stressed that high leverage makes trading very risky. 

He clarified that when traders take on excessive risk, small price changes can quickly wipe out positions, leading to heavy losses. This event does not necessarily mean any action from the exchange.

USDe Stablecoin and the Source of Market Fear

During the October market crash, attention turned to USDe, a stablecoin issued by Ethena. On Binance, USDe temporarily lost its dollar peg and fell to about 65 cents. This sudden drop raised a stablecoin failure fears, triggering wider panic across the market.

Ethena’s founder later explained that the issue was not a failure of the stablecoin itself. Instead, the issue came from a Binance-specific oracle setup. Binance relied on its internal order book instead of broader liquidity sources. 

At the same time, temporary limits on deposits and withdrawals prevented arbitrage traders from correcting the price difference quickly. These factors allowed the price to drift far from its expected value.

However, the exchange maintained that the liquidations were caused by high leverage and sudden market moves. It added that they were not due to system errors or deliberate actions. 

Despite denying responsibility for the crash, Binance paid $283 million to compensate affected users. 

CZ Distances Himself From Binance Management 

CZ made it clear that he spoke as a shareholder and a user of the platform, not as a Binance executive. He stepped down as Binance’s CEO in November 2023. This was after admitting to violations related to anti-money laundering rules in the United States. Although he no longer leads Binance, he remains active in the industry.

At present, he runs YZi Labs, an investment firm that manages close to $10 billion in assets. His comments aimed to clarify his personal view of the events and to distance the discussion from Binance’s management structure.