CZ's Response to FUD: 10/11 Flash Crash Not Caused by Binance System or Operational Issue, Binance is Regulated and Constrained from Any Wrongdoing

Changpeng Zhao, co-founder of Binance, has denied allegations that the exchange caused the October 10 flash crash in the cryptocurrency market. He emphasized that neither he nor Binance sold significant amounts of tokens and that the platform operates under global regulatory oversight.

The October 10 event triggered a $28 billion deleveraging across crypto markets, according to Cathie Wood, ARK Invest CEO. She attributed the crash to a software glitch at Binance, which led to forced liquidations.

Binance has taken steps to address concerns by committing $1 billion from its Secure Asset Fund for Users (SAFU) to Bitcoin. This move aims to support the industry during volatile periods and align with growing institutional demand for the asset.

Why Did This Happen?

The October 10 flash crash caused widespread market turmoil, with Bitcoin dropping below $82,000 and triggering over $1.75 billion in liquidations.

Critics argue that Binance's role in supporting profit-taking, insider trading, and unregulated crypto schemes exacerbated the situation.

OKX founder Star Xu and Cathie Wood have both criticized Binance for the lasting damage caused by the incident, calling for greater transparency and accountability.

How Did Markets React?

Bitcoin and other major cryptocurrencies have seen significant declines since October 10. WLD, CHZ, and HYPE lead the losses as leveraged positions are liquidated amid uncertainty over U.S. monetary policy.

The broader market has not fully recovered, with over 90% of Binance-listed tokens trading below their post-launch highs.