Binance CEO Refutes Claims of Exchange Selling Bitcoin to Stabilize BNB Price

Binance CEO Refutes Claims of Exchange Selling Bitcoin to Stabilize BNB Price

UTC by Chimamanda U. Martha · 4 min read
Binance CEO Refutes Claims of Exchange Selling Bitcoin to Stabilize BNB Price
Photo: Web Summit / Flickr

Several market analysts, including Dylan LeClair and Cory Klippsten, CEO of Swan Bitcoin, have voiced concerns about Binance’s alleged activities in manipulating the market.

Following the recent United States Securities and Exchange Commission (SEC) lawsuit against Binance Holdings Limited and Binance.US, the American arm of the largest global crypto exchange, on June 5, the company’s US market share has dwindled significantly to around 78% as market makers and traders flew the exchange due to the regulatory pressure in the country. Amid these challenges, Binance CEO Changpeng Zhao (CZ) has refuted claims of market manipulation and undisclosed Bitcoin (BTC) sales aimed at artificially stabilizing the value of BNB, the native token of Binance.

Responding to the allegations on Twitter, CZ rebuffed the accusations, asserting that the exchange had not sold any of its BTC or BNB holdings.

Additionally, he revealed that the company still possessed a significant amount of FTT token, the native crypto of the now-defunct company FTX, which declared bankruptcy last year.

The Binance boss expressed his amazement that Binance could manipulate the market, questioning the basis for such conclusions drawn from a price chart involving millions of traders.

“Binance has not sold BTC or BNB. We even still have a bag of FTT. It is amazing they can know exactly who sold based on just a price chart involving millions of traders. FUD,” CZ said.

The market manipulation accusations spurred from speculations on social media that Binance and its boss CZ have been selling “spot BTC at an alarming rate to defend the BNB’s $220 liquidation”.

The crypto asset, which traded above $300 before the SEC’s lawsuit, significantly dropped to as low as $220, hitting the lowest since mid-March.

Doubts and Unusual Price Action

Several market analysts, including Dylan LeClair and Cory Klippsten, CEO of Swan Bitcoin, have also voiced concerns about Binance’s alleged activities in manipulating the market to artificially inflate the BNB’s value.

In his tweet, LeClair described the BNB market as “clearly a fake market”, alleging that its trading volume is less realized than BTC.

Klippsten, on the other hand, claimed that Binance is engaging in wash trading, a type of scam that involves the artificial inflation of trading volumes by executing fake buy and sell orders.

The Swan Bitcoin CEO claimed that the crypto exchange participated in the scam while pretending there was support for BNB.

Another analyst, Joe Consorti from The Bitcoin Layer, also found the price action of BNB to be unusual, particularly around the $220 level, which seemed staunchly defended.

He suggested that this level may be a liquidation point for BNB-collateralized loans.

Commenting on CZ’s statement that Binance did not engage in market manipulation practices, Consorti emphasized the need for the exchange to publish audited information that proves the absence of BNB-collateralized liabilities.

He believes that such transparency is essential to dispel the FUD surrounding the allegations.

Meanwhile, the crypto market reacted negatively to the news of the SEC’s lawsuit against Binance, CZ, and Binance.US, alleging that the company’s crypto assets, BNB and BUSD, are security products.

BTC and ether tumbled below $26 000 and $1, 800 respectively, indicating a 4.5% and 8% decline since the SEC’s legal battle with Binance.

Other altcoins also experienced significant drops, causing investors to lose their funds as the market dwindled.

Altcoin News, Binance News, Bitcoin News, Cryptocurrency News, News
Related Articles