CZ rejected assertions that Binance incited the historic $19 billion crypto liquidation event this past October, characterizing the accusations against the marketplace as “implausible.” Through his rebuttal, the exchange’s culpability is denied.
Ex-Binance chief Changpeng “CZ” Zhao has countered claims that the digital currency exchange contributed to the most significant liquidation crisis in crypto history, a market rout whose consequences are still felt more than three months later.
During a live digital forum on the exchange’s community platforms, Zhao contested the notion that Binance served as a primary catalyst for the unprecedented surge in forced closures on October 10, when nearly $19 billion in equity was obliterated throughout the cryptocurrency sector.
Zhao characterized the assertions that Binance instigated the downturn as “implausible,” according to a report by Bloomberg. Through this statement, the direct responsibility of the marketplace is disputed.
“There are a larger group who claim the October 10th crash was caused by Binance and wants Binance to compensate everything,”
Zhao said, rejecting the accusations outright.
Zhao guided Binance from its inception in 2017 until his resignation as CEO in November 2023, following a guilty plea to U.S. federal charges involving anti-money laundering lapses. A term of imprisonment was subsequently served by him in relation to the matter, though a presidential pardon was granted by Donald Trump this past October.
Consequently, Zhao mentioned on Friday that his remarks were being delivered in his role as a Binance stakeholder and consumer, rather than as an official spokesperson for the marketplace. Through this clarification, the official stance of the company is distanced from his personal observations.
Despite his departure from Binance’s leadership, Zhao maintains a prominent presence in the sector, currently directing YZi Labs. This independent investment firm, which branched off from Binance’s former venture capital division, oversees a portfolio valued at approximately $10 billion, through which his influence over emerging technologies is sustained.
October Market Crash Triggered Brief USDe Depeg on Binance
Binance occupied the epicenter of investigation during the October 10 market collapse, following a sudden divergence of Ethena’s USDe stablecoin from its dollar peg on the platform. In light of this volatility, the exchange’s risk management protocols were questioned by market observers.
In the heat of the divestment, USDe momentarily dropped from its $1 parity to roughly $0.65 on the Binance exchange. This deviation, which triggered widespread concern, was later attributed to a platform-exclusive internal oracle malfunction.
At the time, Guy Young, the founder of Ethena Labs, indicated that the pricing imbalance was restricted to a solitary marketplace. Through his explanation, the systemic nature of the incident is dismissed.
“The severe price discrepancy was isolated to one venue that referenced an oracle index from its own order book rather than the deepest liquidity pool,” Young said. “The venue was also experiencing deposit and withdrawal issues during the event, which prevented market makers from closing the arbitrage loop.”
In the aftermath of the event, roughly $283 million was reimbursed to impacted clients by Binance. Through this action, the marketplace fulfilled its commitment to address the financial discrepancies caused by the asset depegging.
In the period following the extensive market-wide sell-off, cryptocurrency valuations have found it difficult to regain momentum. Bitcoin, which commanded a price exceeding $126,000 in early October, momentarily plummeted below the $80,000 threshold in November. This decline fueled a more comprehensive market retreat, through which over $1 trillion in total market capitalization was eliminated from the peaks seen at the start of October.
