Binance Founder Firmly Rejects Allegations of Crypto Market Crash Responsibility
Changpeng "CZ" Zhao, the co-founder and former chief executive officer of Binance, has strongly dismissed persistent accusations that the world's largest digital asset trading platform was responsible for the catastrophic cryptocurrency market crash that occurred last October. In a recent public appearance, Zhao characterized these claims as "far-fetched" and lacking substantial evidence.
Public Defense During Live Q&A Session
During a live ask-me-anything session hosted on Binance's proprietary social platform, Zhao addressed the controversy head-on. He explicitly denied that Binance served as a primary catalyst for the unprecedented wave of liquidations that rocked the crypto industry on October 10th. This event saw approximately $19 billion in leveraged cryptocurrency positions wiped out in a single day, marking the largest liquidation event in the sector's roughly 16-year history.
Zhao countered allegations that technical glitches and price discrepancies on the Binance platform triggered the massive sell-off. "There are a larger group who claim the October 10th crash was caused by Binance and wants Binance to compensate everything," Zhao stated during the Friday session. He added pointedly, "If you are living in those world in your head, you are unlikely to be successful in the future."
Compensation and Regulatory Oversight Details
Following the market turmoil, Binance implemented a compensation program for affected users, distributing around $600 million to customers and businesses who experienced losses. Zhao emphasized that users who suffered financial damage due to Binance's system issues during the October crash have already been fully compensated.
The former CEO highlighted Binance's regulatory standing, noting the company operates as a regulated entity in Abu Dhabi with local regulators having complete access to its operational activities. Furthermore, Zhao referenced the ongoing monitorship maintained by the United States government over the platform's operations.
Zhao's Current Role and Legal Background
During his remarks, Zhao clarified that he was speaking strictly as a shareholder and user of Binance, not in any official executive capacity. He stepped down from his CEO position in November 2023 as part of a resolution with U.S. enforcement authorities after pleading guilty to charges of failing to maintain an effective anti-money laundering program.
As a component of that settlement agreement, Binance Holdings committed to retaining an independent external compliance monitor to oversee and test its regulatory adherence. In a significant development, Zhao received a presidential pardon from former President Donald Trump in October 2025. Recent reports from September 2025 indicate Binance is nearing a potential agreement with the U.S. Justice Department that could eliminate the monitor requirement.
Industry Criticism and Market Impact
The October market collapse drew sharp criticism from various industry participants who questioned the practices of certain cryptocurrency exchanges during the crisis. Prominent figures including Don Wilson of DRW criticized platforms for not maintaining neutral trading environments during the market meltdown.
This event has sparked broader conversations about exchange responsibility, market stability mechanisms, and regulatory frameworks within the rapidly evolving cryptocurrency landscape. Zhao's comments represent the latest chapter in the ongoing debate about accountability in digital asset markets following significant volatility events.
