CZ Denies Binance’s Role in $19 Billion Crypto Market Collapse

In a fiery rebuttal that has sent shockwaves through the cryptocurrency world, Changpeng Zhao (CZ), the embattled founder of Binance, has forcefully rejected allegations that his exchange was responsible for triggering the most devastating liquidation event in crypto history last October.

During a high-stakes Q&A session on Binance’s social media channels, Zhao dismissed claims that the exchange orchestrated the catastrophic $19 billion liquidation cascade that wiped out leveraged positions and sent Bitcoin tumbling from $126,000 to below $80,000 in a matter of weeks.

The October 10th Massacre: Market Chaos or Orchestrated Collapse?

The controversy centers on October 10th, 2025, when cryptocurrency markets experienced unprecedented carnage. Over $19 billion in leveraged positions were liquidated within hours, triggering a domino effect that erased more than $1 trillion in total market capitalization.

“The allegations are not just wrong—they’re far-fetched,” Zhao declared during the session. “Some market participants are looking for someone to blame for their losses, and unfortunately, they’ve chosen Binance as their scapegoat.”

What makes these accusations particularly explosive is the timing. The liquidation event coincided with a brief depegging of Ethena’s USDe stablecoin on Binance, where it plummeted to $0.65 before recovering. This technical glitch, combined with the massive liquidations, created the perfect storm of suspicion.

Speaking as a Shareholder, Not an Executive

Crucially, Zhao emphasized that he was speaking as a shareholder and platform user, not in his former capacity as Binance CEO. This distinction matters because Zhao stepped down from his executive role in November 2023 following a guilty plea to US federal charges related to anti-money laundering violations.

After serving prison time, Zhao received a controversial pardon from President Donald Trump in October 2025—a move that has only intensified scrutiny of his activities and statements.

“I’m no longer running the exchange,” Zhao clarified. “I’m just another user who believes in the technology and the community.”

The Oracle Glitch Theory

The plot thickened when Ethena founder Guy Young revealed that the USDe depegging was caused by a platform-specific oracle issue rather than any fundamental problem with the stablecoin itself.

“The price dislocation was confined to a single trading venue that relied on its own order book rather than deeper liquidity pools,” Young explained. “Temporary deposit and withdrawal issues prevented arbitrage traders from correcting the imbalance.”

This technical explanation, however, hasn’t satisfied critics who point to the suspicious timing of the glitch and the subsequent liquidation cascade.

Binance’s $283 Million Compensation Package

In an attempt to quell the controversy, Binance compensated affected users to the tune of approximately $283 million. But for many in the crypto community, this payout only raised more questions than it answered.

“Why would they pay out such a massive sum if they weren’t responsible?” asked one prominent crypto analyst who wished to remain anonymous.

The Leverage Debate Reignited

The October massacre has reignited fierce debate about the role of leverage in cryptocurrency markets. Critics argue that the incident exposed fundamental flaws in how major exchanges handle extreme market conditions.

“The fact that $19 billion in leveraged positions could be liquidated in such a short timeframe shows we’re playing with fire,” warned Samer Hasn, analyst at XS.com. “These markets are becoming increasingly fragile.”

Meanwhile, Bitwise CIO Matt Hougan sees the incident as part of a broader pattern of market uncertainty. He points to gold’s surge past $5,000 per ounce and growing unease about US crypto legislation as signs that digital asset markets are entering a “critical moment.”

The $1 Trillion Question

The numbers are staggering. When Bitcoin crashed from its October highs, it dragged the entire crypto market down with it, eliminating over $1 trillion in value. For perspective, that’s more than the GDP of most countries.

“Was this a natural market correction, or was something more sinister at play?” asks crypto researcher Dr. Elena Rodriguez. “The scale of the destruction suggests we may never know the full story.”

CZ’s Parting Shot

In what many are calling his most provocative statement yet, Zhao issued a stark warning to those who continue to blame Binance for the market crash.

“If you’re living in those world in your head, you are unlikely to be successful in the future,” he said, suggesting that conspiracy theories about the exchange’s role in the liquidation event are counterproductive and potentially harmful to one’s investment prospects.

The Road Ahead

As the crypto community continues to grapple with the fallout from October’s events, questions remain about the future of leverage trading, exchange responsibility, and market stability.

With CZ still wielding significant influence through his YZi Labs investment firm—which manages approximately $10 billion in assets—his statements carry weight far beyond his former role at Binance.

Whether the October 10th liquidation was a tragic market event or something more orchestrated remains one of crypto’s most hotly debated topics. But one thing is certain: the incident has fundamentally changed how many in the industry view the relationship between major exchanges and market stability.

As Bitcoin continues to trade well below its October highs and regulatory scrutiny intensifies, the crypto world watches closely to see whether history will repeat itself—or whether the lessons of October 10th will finally lead to meaningful reform.

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