Binance CEO CZ Dismisses Accusations Of BTC/BNB Dumping

In a recent lawsuit filed by the US Securities and Exchange Commission (SEC) against Binance, a major cryptocurrency exchange, concerns have arisen within the crypto industry. The value of (BNB) has experienced a downturn as a result of the lawsuit and an exploit discovered on the Binance Smart Chain’s Binance Bridge. Moreover, allegations have emerged regarding Binance and its CEO, Changpeng Zhao (CZ), involving the sale of spot Bitcoin (BTC) in a “liquidation waterfall” strategy. CZ has taken to Twitter to respond to these claims, aiming to clarify the situation and refute the allegations.

Responding to a tweet by Skew, CZ firmly denied the accusations of selling BTC. Through his official Twitter account, CZ expressed astonishment at the idea that specific sellers can be determined solely based on a price chart involving millions of traders. He dismissed it as FUD (Fear, Uncertainty, and Doubt), emphasizing that such claims lack credibility.

Skew had alleged that BTC was being sold off to increase USDT reserves, which were then aggressively utilized to pump into BNB since May 27th. Furthermore, BNB was purportedly sold off for BUSD to suppress volatility in BTC, and BUSD was subsequently pumped into BTC to minimize downside volatility. This intricate process facilitated the swapping of BTC for USDT.

CZ’s response aims to reassure the exchange and its users amidst the ongoing SEC lawsuit. By staunchly refuting the allegations, CZ strives to restore confidence in the integrity of Binance’s operations.

Binance’s Defensive Measures Against A $220 Liquidation Waterfall

Another tweet, this time by @JW100x, alleged that Binance and CZ were selling spot Bitcoin as a defense mechanism against a $220 liquidation waterfall. Reports emerged that CZ had been taking preemptive steps to prevent BNB from plummeting to the critical level of $220. Breaching this level could result in the liquidation of $200 million within the Venus Decentralized Autonomous Organization (DAO).

Exchanges commonly utilize the “liquidation waterfall” strategy to protect their users from notable losses. This strategy involves selling spot Bitcoin and acquiring BNB to shield against the $220 liquidation threshold and reduce the risk of substantial losses. Nonetheless, it is important to note that this approach also limits the potential growth of Bitcoin.

Bitcoin (BTC) has observed a slight decline in value over the past week, currently standing at $25,922.80, reflecting a decrease of 3.72% within the last seven days.

As the SEC lawsuit against Binance unfolds, CZ’s response provides a counter-narrative to the allegations of BTC/BNB dumping. Binance and its users look to CZ for reassurance, as the CEO strives to restore trust in the platform’s operations amidst the ongoing legal challenges.