Binance Defended: CZ Addresses Oct 10 Crypto Market Turmoil

In the dynamic and often volatile realm of digital assets, market events frequently invite intense scrutiny and debate regarding their underlying causes. One such significant event was the sharp cryptocurrency market crash on October 10, which led to widespread liquidations and considerable financial repercussions across the industry. Changpeng “CZ” Zhao, the influential co-founder and former CEO of Binance, the world’s largest cryptocurrency exchange by trading volume, has recently addressed persistent allegations linking his platform directly to this turbulent period. During a live ask-me-anything (AMA) session hosted on Binance’s proprietary social platform, Zhao characterized these accusations as "far-fetched," emphasizing that such singular attribution profoundly oversimplifies the multifaceted nature of one of the crypto market's most challenging days.

Analyzing the October 10 Crypto Market Event

The October 10 incident stands as a landmark event in the relatively brief 16-year history of the cryptocurrency market, marked by an estimated $19 billion worth of leveraged crypto positions being wiped out. This record-breaking single-day liquidation event was characterized by sudden and extreme price swings, coupled with technical disruptions and significant liquidity issues that collectively impacted traders globally. The scale of capital erosion led many to seek a definitive cause, with Binance frequently cited as a primary instigator due to its dominant market position.

During the AMA, Zhao unequivocally rejected the notion that Binance was the singular or even primary force behind this unprecedented wave of liquidations. He argued that pinpointing one entity as solely responsible for such a complex market downturn disregards the intricate web of factors that contribute to market volatility. While acknowledging that Binance, like many other platforms, experienced system glitches and pricing discrepancies amid the chaos, Zhao maintained that these internal issues were distinct from the broader market collapse, serving as symptoms rather than the fundamental cause.

Binance's Response and Compensation

In the aftermath of the October 10 crash, Binance undertook measures to address the platform-specific issues that affected its users. Zhao highlighted that the cryptocurrency exchange had already compensated users and businesses directly impacted by these technical problems, with total payouts amounting to approximately $600 million. This proactive approach, according to Zhao, ensured that customers who incurred losses due to Binance’s technical malfunctions were fully reimbursed, demonstrating a commitment to user welfare despite the challenging circumstances. Zhao notably remarked, “There are a larger group who claim the October 10th crash was caused by Binance and wants Binance to compensate everything. If you are living in those world in your head, you are unlikely to be successful in the future,” underscoring his stance on individual accountability in market participation.

Regulatory Scrutiny and Corporate Governance

Beyond market events, Binance operates within an increasingly stringent global regulatory landscape. Zhao utilized the session to reaffirm the exchange’s adherence to regulatory frameworks, noting its status as a regulated entity in Abu Dhabi. He emphasized that local authorities in Abu Dhabi possess full access to the company’s operational data, thereby ensuring a high degree of transparency and accountability. Furthermore, the former executive pointed out that Binance continues to operate under the supervision of a US government monitorship. This ongoing oversight reinforces his assertion that the platform’s activities are subject to significant and continuous scrutiny from prominent international regulatory bodies, countering narratives of unchecked operations.

It is pertinent to recall that Zhao’s leadership role at Binance concluded in November 2023, as part of a resolution reached with US authorities. Despite this, he clarified that his recent comments were made in his capacity as a Binance shareholder and a committed user, rather than as an active executive. This distinction is crucial, as it positions his remarks as those of an invested stakeholder observing the company’s trajectory and defending its operational integrity from an informed, yet detached, perspective.

The Political Dimension: Trump Pardon Controversy

Zhao's personal legal situation took an unexpected turn in October 2025 when he received a presidential pardon from Donald Trump. This development immediately reignited public debate and attracted considerable political criticism, particularly from Democratic lawmakers, who questioned both the rationale behind the decision and the alleged political and business connections between Binance and the Trump administration. Addressing these concerns in a separate interview with CNBC, Zhao vehemently denied any business relationship with the Trump family. He stated, “There’s no business relationship whatsoever,” and contended that the broader narrative surrounding the pardon and Binance’s supposed ties to Trump had been significantly "misconstrued," highlighting the often-politicized nature of high-profile financial narratives.

Market Implications and BNB Performance

Amidst these controversies and market dynamics, the performance of Binance Coin (BNB), the exchange’s native utility token, remains a key indicator of investor sentiment and market health. As of the time of this writing, BNB is trading at approximately $847. The token has experienced a 5% decline over the past week, mirroring a broader downturn observed across the digital asset market. This recent performance places BNB approximately 38% below its all-time record high of $1,369, achieved just last year. This fluctuation underscores the inherent market volatility that affects even the most established digital assets and their associated platforms, irrespective of their operational stability or regulatory compliance.

In conclusion, CZ’s defense of Binance against claims of responsibility for the October 10 crypto crash sheds light on the complexities of attributing blame in highly interconnected financial ecosystems. His emphasis on regulatory compliance, user compensation, and the multifaceted nature of market movements provides a nuanced perspective, aiming to distinguish between platform-specific issues and broader market forces. As the digital asset space continues to evolve, the interplay between market dynamics, technological reliability, and regulatory oversight will undoubtedly remain central to its narrative.