CZ rejects claims that Binance brought about the $19B October liquidation crash, as trade leaders debate leverage dangers, regulation, and market construction.
Former Binance CEO Changpeng “CZ” Zhao has denied allegations linking Binance to the biggest crypto liquidation occasion. The October 10 sell-off destroyed about $19billion and continues to be influencing market threat discussions worldwide.
CZ Pushes Again In opposition to Binance Blame for October Liquidation Crash
Throughout a question-and-answer session on Binance’s social media channels, Zhao denied allegations in opposition to the cryptocurrency trade. He mentioned that Binance was not a major contributor to the wave of compelled liquidations.
In accordance with Zhao, tales about Binance being liable for the crash are far-fetched and haven’t any proof. Additional, he rejected calls from some merchants for full compensation for losses.
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Zhao mentioned that over your complete crypto market, the stress from an excessive amount of leverage exacerbated liquidation stress. Subsequently, he urged that pointing the finger of blame at a single trade oversimplifies complicated market dynamics.
He additionally highlighted the regulation oversight Binance has in addressing misconduct allegations. Binance is regulated below Abu Dhabi regulation and continues to be below the watch of the U.S. authorities.
In accordance with Zhao, this construction ensures transparency in operational actions. Consequently, allegations of uncontrolled threat administration are widespread, he mentioned.
With regard to the losses to customers, Zhao mentioned Binance has already paid about $600 million in compensation. These funds helped cowl losses related to verified technical glitches for excessive volatility.
Nonetheless, assist from trade friends continued within the type of criticism following the occasion. OKX CEO Star Xu didn’t hesitate to assault Binance’s position available in the market construction.
No complexity. No accident.
10/10 was brought on by irresponsible advertising and marketing campaigns by sure corporations.On October 10, tens of billions of {dollars} had been liquidated. As CEO of OKX, we noticed clearly that the crypto market’s microstructure basically modified after that day.… pic.twitter.com/N1VlY4F7rt
— Star (@star_okx) January 31, 2026
Xu contended that Binance incentivized the conversion of USDT and USDC into USDe with out sufficient warnings. He mentioned USDe has the hedge fund-like threat traits which are unsuitable for retail customers.
In accordance with Xu, Binance additionally permitted the repetitive use of USDe as collateral. In consequence, this created a high-risk suggestions loop in instances of burdened market situations.
Business Divisions Emerge Over Causes of $19B Market Wipeout
In distinction, Wintermute founder Evgeny Gaevoy cautioned about single-exchange blame narratives. He mentioned attributing the crash to at least one platform just isn’t logical.
Gaevoy defined that bear markets are inclined to foment emotional scapegoating over evaluation. Nonetheless, he said systemic leverage and liquidity gaps had been behind the decline.
The liquidation occasion, coined “Crypto Black Friday,” was the biggest within the historical past of the trade. Over $19.1 billion of leveraged positions disappeared in 24 hours.
Analysts largely agree that the crash was linked to macroeconomic shocks and exchange-specific actions. Then-candidate Donald Trump unveiled 100% tariffs on choose Chinese language expertise imports.
That announcement began fast deleveraging throughout threat property, together with cryptocurrencies. In consequence, Bitcoin plummeted from round $118,000 to round $101,000.
Researchers talked about technical issues on centralized exchanges exacerbated promoting stress. Moreover, skinny liquidity situations added to the cascading purge of extra leverage.
Regardless of disagreements, most observers concur that leverage administration is a elementary trade problem. Subsequently, exchanges come below rising stress to reinforce threat disclosures and threat controls.
Zhao maintained that Binance didn’t orchestrate or speed up the liquidation cascade. As an alternative, he reiterated that market-wide leverage and macro shocks dominated worth motion.
The episode heightened regulatory oversight and investor warning in digital asset markets. Furthermore, it reworked discussions of accountability of exchanges and systemic threat publicity.
Because the markets grow to be extra secure, members proceed to reassess the practices of leverage and collateral buildings. In consequence, the October crash continues to be a lesson within the resilience of the crypto market.
Whereas tales fluctuate, the liquidation occasion highlighted vulnerabilities in instances of utmost volatility. On the finish of the day, it stays elusive to have an trade consensus that’s reflective of the evolving threat framework of crypto.