CZ Pushes Back Against Binance Blame as Questions Linger Over Crypto’s $19 Billion October Collapse

Former Binance chief executive Changpeng “CZ” Zhao has publicly rejected claims that the world’s largest cryptocurrency exchange played a central role in October’s historic market crash, an event that triggered roughly $19 billion in liquidations and sent shockwaves through the digital asset industry that are still being felt months later.

Speaking during a question-and-answer session hosted on Binance’s social media channels, Zhao dismissed allegations that the exchange fueled the October 10 sell-off, describing them as exaggerated and unsupported. According to Bloomberg, Zhao characterized the accusations as “far-fetched,” responding to a growing chorus of critics who argue that Binance’s trading activity and infrastructure issues intensified the market rout.

“There are a larger group who claim the October 10th crash was caused by Binance and wants Binance to compensate everything,” Zhao said, flatly rejecting the premise of those demands. He stressed that Binance was not responsible for the systemic cascade of liquidations that swept across centralized and decentralized platforms alike.

Zhao’s remarks carry particular weight given his complicated relationship with the exchange he founded in 2017. He stepped down as Binance’s CEO in November 2023 after pleading guilty to U.S. federal charges related to anti-money laundering violations. Following a prison sentence, Zhao was pardoned by U.S. President Donald Trump last October. As a result, he was careful to clarify that he was speaking as a shareholder and user of Binance, not as a representative of the company itself.

Despite his departure from day-to-day operations, Zhao remains a prominent figure in the crypto ecosystem. He now oversees YZi Labs, an independent investment firm that emerged from Binance’s former venture capital arm and manages approximately $10 billion in assets. His continued visibility has kept him closely associated with Binance in the public eye, even as he insists on a clear separation from its management.

Much of the scrutiny surrounding Binance stems from events that unfolded during the October crash, particularly a sharp and brief depegging of Ethena’s USDe stablecoin on the platform. At the height of the sell-off, USDe fell from its intended $1 value to around $0.65 on Binance, sparking fears that the exchange’s infrastructure had amplified market stress.

Ethena Labs later attributed the price dislocation to a platform-specific oracle issue rather than broader market manipulation. Founder Guy Young explained that the discrepancy was confined to a single trading venue that relied on an internal order book index instead of deeper liquidity pools. He added that deposit and withdrawal disruptions during the episode prevented market makers from executing arbitrage strategies that might have restored the peg more quickly.

In the aftermath, Binance compensated affected users with roughly $283 million, a move that helped contain reputational damage but did little to silence critics. Meanwhile, the broader market has struggled to regain its footing. Bitcoin, which traded above $126,000 in early October, slipped below $80,000 the following month before stabilizing near $84,000, contributing to a wider downturn that erased more than $1 trillion in total crypto market capitalization.

While Zhao’s rebuttal seeks to draw a line under Binance’s role in the crash, the episode has reignited debates over exchange accountability, market structure and the fragility of crypto liquidity during periods of extreme stress. For now, those questions remain unresolved, even as industry leaders push back against narratives they view as overly simplistic.