Crypto News: CZ Denies Binance Role in Historic $19B Crypto Liquidations

CZ rejects claims that Binance caused the $19B October liquidation crash, as industry leaders debate leverage risks, regulation, and market structure.

Former Binance CEO Changpeng “CZ” Zhao has denied allegations linking Binance to the largest crypto liquidation event. The October 10 sell-off destroyed about $19billion and is still influencing market risk discussions worldwide.

CZ Pushes Back Against Binance Blame for October Liquidation Crash

During a question-and-answer session on Binance’s social media channels, Zhao denied allegations against the cryptocurrency exchange. He said that Binance was not a significant contributor to the wave of forced liquidations.

According to Zhao, stories about Binance being responsible for the crash are far-fetched and have no evidence. Further, he rejected calls from some traders for full compensation for losses.

Related Reading: Binance to Shift $1B SAFU Fund Into Bitcoin Reserves Within 30 Days | Live Bitcoin News

Zhao said that over the entire crypto market, the pressure from too much leverage exacerbated liquidation pressure. Therefore, he suggested that pointing the finger of blame at a single exchange oversimplifies complex market dynamics.

He also highlighted the regulation oversight Binance has in addressing misconduct allegations. Binance is regulated under Abu Dhabi law and is still under the watch of the U.S. government.

According to Zhao, this structure guarantees transparency in operational activities. Consequently, allegations of uncontrolled risk management are widespread, he said.

With regard to the losses to users, Zhao said Binance has already paid about $600 million in compensation. These payments helped cover losses associated with verified technical glitches for extreme volatility.

However, support from industry peers continued in the form of criticism following the event. OKX CEO Star Xu did not hesitate to attack Binance’s role in the market structure.

No complexity. No accident.
10/10 was caused by irresponsible marketing campaigns by certain companies.

On October 10, tens of billions of dollars were liquidated. As CEO of OKX, we observed clearly that the crypto market’s microstructure fundamentally changed after that day.… pic.twitter.com/N1VlY4F7rt

— Star (@star_okx) January 31, 2026

Xu contended that Binance incentivized the conversion of USDT and USDC into USDe without adequate warnings. He said USDe has the hedge fund-like risk characteristics that are unsuitable for retail users.

According to Xu, Binance also permitted the repetitive use of USDe as collateral. As a result, this created a high-risk feedback loop in times of stressed market conditions.

Industry Divisions Emerge Over Causes of $19B Market Wipeout

In contrast, Wintermute founder Evgeny Gaevoy cautioned about single-exchange blame narratives. He said attributing the crash to one platform is not logical.

Gaevoy explained that bear markets tend to foment emotional scapegoating over analysis. However, he stated systemic leverage and liquidity gaps were behind the decline.

The liquidation event, coined “Crypto Black Friday,” was the largest in the history of the industry. Over $19.1 billion of leveraged positions disappeared in 24 hours.

Analysts largely agree that the crash was linked to macroeconomic shocks and exchange-specific actions. Then-candidate Donald Trump unveiled 100% tariffs on select Chinese technology imports.

That announcement started rapid deleveraging across risk assets, including cryptocurrencies. As a result, Bitcoin plummeted from around $118,000 to around $101,000.

Researchers mentioned technical problems on centralized exchanges exacerbated selling pressure. Additionally, thin liquidity conditions added to the cascading purge of excess leverage.

Despite disagreements, most observers concur that leverage management is a fundamental industry challenge. Therefore, exchanges come under increasing pressure to enhance risk disclosures and risk controls.

Zhao maintained that Binance didn’t orchestrate or accelerate the liquidation cascade. Instead, he reiterated that market-wide leverage and macro shocks dominated price action.

The episode heightened regulatory oversight and investor caution in digital asset markets. Moreover, it transformed discussions of accountability of exchanges and systemic risk exposure.

As the markets become more stable, participants continue to reassess the practices of leverage and collateral structures. As a result, the October crash is still a lesson in the resilience of the crypto market.

While stories vary, the liquidation event highlighted vulnerabilities in times of extreme volatility. At the end of the day, it remains elusive to have an industry consensus that is reflective of the evolving risk framework of crypto.