CZ Fires Back: Binance Not to Blame for Record $19B Crypto Crash

In a room where the screen glowed with patient moralizing, Changpeng Zhao-CZ to those who pronounce his name with a shrug-addressed the world in a live AMA. He did not smile at the thought that Binance might have toppled the market; he called it far-fetched, as if a single exchange could hold the weather in its palm.

Last October’s sell-off, he reminded his audience, was not a solo act but a chorus. A day when leveraged bets, fear, and a peculiar hunger for stories about faults danced together, and the market paid with its breath.

What Actually Happened in October

A tide of forced liquidations pressed against prices, and liquidity dried up as if a cafe ran out of coffee mid-morning. Minor gaps leaped to become avalanches; the trading halls-whether Binance or others-seemed to sprain under the weight of activity. Investors grew pale, which is to say, they did what investors do when asked to believe two contradictory things at once.

Some spoke of glitches and mispricings; Zhao, who prefers the measured drumbeat of reason to melodrama, said these issues were resolved quickly and did not mean Binance caused the broader collapse. The market, he implied, is a stubborn animal that forgets nothing and forgives nothing, especially not a rumor.

Binance’s Response and Compensation

In the aftermath, Binance compensated affected users and businesses roughly $600 million for losses tied to platform-related issues. Zhao framed this as accountability, not guilt-a pragmatist’s attempt to keep the lights on and the headlines quiet at the same time.

He noted that Binance operates under regulatory oversight in Abu Dhabi and remains under U.S. monitors, suggesting that multiple authorities are watching with the patience of a librarian who suspects a trick book exists somewhere in the shelves.

Regulatory and Political Backdrop

Zhao’s comments come as Binance threads through a shifting regulatory landscape. He has a curious biography-pardon in 2025, murmurs about compliance monitors being eased-that makes the debates feel like the last act of a long, unwieldy play. The stage directions keep changing, but the actors still must perform.

Critics Say Questions Remain

Not everyone swallows Zhao’s defense whole. Some market observers argue that the $600 million payout is itself a confession that something went wrong, even if only in the technical mischief of systems and liquidity. Others insist that the deeper, structural risks-leverage, infrastructure, and the fragility of belief-remain unresolved.

From this angle, October was less about a single villain and more about a system that learns too slowly and scares too easily.

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FAQs

Who was most affected by the October liquidation event, and why?
Highly leveraged retail traders took the hardest hit as automated liquidations swept their positions away like autumn leaves. Market makers and smaller exchanges felt the pressure of sudden liquidity gaps.

What are the likely regulatory consequences after this crash?
Expect pushes for stricter leverage limits, stronger stress testing, and clearer outage disclosures. Oversight bodies focus on systemic stability, and on not letting the same drama repeat itself too loudly.

What should traders and investors expect going forward?
Exchanges will invest more in infrastructure resilience and volatility controls. Traders should stay wary of leverage and the seductive lure of a quick profit when the wind is against you.

2026-01-31 10:07