Crypto News: Binance Rejects ETH, SOL Dumping Claims, Cites Liquidity Support

On February 26, 2025, Binance responded to crypto news reports from February 24, denying trader claims that it manipulated the market by dumping millions of SOL and ETH tokens.

The controversy began when on-chain data, reported by Arkham Intelligence on February 24, 2025, showed Binance transferring approximately 103,570 SOL (valued at $16.32 million) and 25,000 ETH (worth about $80 million) to the market maker Wintermute.

This move, interpreted by some as Binance offloading tokens, coincided with a significant market crash on February 25, 2025, where liquidations surpassed $1 billion, fueling fear, uncertainty, and doubt (FUD) among investors.

Crypto News: Binance’s Denial and Clarification

In response, Binance, through its customer support X account, denied the accusations of dumping or selling tokens. On February 26, 2025, the exchange stated, “As an exchange, we simply help users match trades and have no visibility into our users’ decisions, including market makers who may move their assets according to their strategies.”

Binance emphasized that many traders misunderstood the on-chain transactions linked to Wintermute, urging users not to jump to conclusions based on transaction screenshots.

The exchange also highlighted its market surveillance program, designed to detect and prevent market manipulation, ensuring a fair trading environment for all users.

The February 24, 2025, transfer to Wintermute sparked crypto news buzz as traders accused Binance and Bybit of market manipulation through large sell-offs and price capping.

This speculation grew stronger after the February 25 market crash, which saw Bitcoin drop below $90,000, leading to over $1 billion in liquidations.

However, Binance maintains there is no conclusive evidence to support these claims, and the accusations appear to stem from misinterpretations of the data.

Role of Market Makers and Liquidity Support

To provide context, market makers are firms or entities that specialize in providing liquidity in the crypto market by placing buy and sell orders, thus tightening bid-ask spreads and enabling smoother trading activities.

They play a crucial role in absorbing large orders, reducing price volatility, and contributing to market stability.

Binance explained that exchanges often partner with market makers by providing them with tokens as bonuses or incentives to continuously increase their inventory.

In this case, the transfer to Wintermute was likely an incentive for the market maker to enhance liquidity on the platform, not a sell-off.

A crypto news analyst on X echoed this view on February 26, 2025, clarifying that Binance did not sell the tokens to Wintermute; instead, Wintermute withdrew them to maintain market liquidity. This aligns with Binance’s explanation, shedding light on the situation.

The February 25, 2025, market crash, which triggered over $1 billion in liquidations, has fueled trader accusations of exchange manipulation.

However, Binance’s response aims to dispel these claims by emphasizing the independent role of market makers and the exchange’s lack of control over their trading strategies.