Why does Cryptocurrency Twitter dislike the largest exchanges?

Crypto Twitter is angry again. This time, the target is a familiar target: Binance, the world's largest cryptocurrency exchange, and its co-founder Changpeng Chao (CZ).

Big allegations have been featured on Twitter (or X) timelines in recent days, with some users calling him a “fraud” and demanding he be “sent back to jail.” So what is actually behind the latest accusations, and how many of them are supported by verifiable evidence?

October market crash: What happened?

One of the most serious allegations facing Binance dates back to October, during what became known as “Crypto Black Friday.”

On October 10, US President Donald Trump announced 100% tariffs and export restrictions on China. The announcement immediately shook global markets, causing risk assets to plummet.

Cryptocurrency was no exception. BeInCrypto reported that Bitcoin has fallen by about 10%. Major altcoins followed suit: Ethereum ($ETH), $XRP ($XRP), and $BNB ($BNB) each decreased by more than 15%.

The virtual currency market crashed on October 10th. Source: TradingView

More than $19 billion in leveraged positions were liquidated within 24 hours, making it the largest liquidation event tracked by crypto data analysis firm Coinglass.

Initially, the crash was widely seen as a market-wide panic caused by macroeconomic news. However, market participants soon began to question whether the collapse was purely organic.

Traders speculated on social media that the size and speed of the liquidation suggested something more orchestrated than a typical sell-off. Binance quickly attracted attention.

Why did Binance attract attention?

During the most intense phase of the selloff, Binance users reported account freezes, failed stop-loss orders, and difficulty accessing the platform. Some traders also pointed to the brief flash crash that pushed assets like Enjin (ENJ) and Cosmos (ATOM) to near zero.

BeInCrypto reported that three assets are listed on Binance, including: $USDewBETH, and BNSOL temporarily lost ground amid the turmoil.

Binance publicly acknowledged the disruption during the event. The exchange cited “intense market activity” as the cause of system delays and display issues, and reiterated that users' funds remain in SAFU.

Still, this explanation failed to calm all critics. Some users accused Binance of benefiting from the trading freeze, arguing that the disruption allowed the exchange to profit during peak volatility.

Did Binance's reward strategy work?

On October 12, Binance released a statement following an internal investigation into the incident. The exchange said its core spot and futures matching engine and API trading remained operational.

“According to the data, the forced liquidation amount processed by the Binance platform constituted a relatively small proportion of the total trading volume, indicating that this volatility was mainly caused by the overall market situation,” the exchange noted.

However, Binance acknowledged that after 21:18 UTC on October 10, a brief technical glitch occurred in certain platform modules, and some assets were affected by the depegging due to extreme market fluctuations.

Binance announced that it had completed compensating the affected users within 24 hours, distributing approximately $283 million in two installments.

Two days later, on October 14, Binance launched a $400 million support initiative. The package included $300 million in redemption vouchers for eligible affected traders, with the remaining funds earmarked for low-interest institutional loans.

Binance was at the center of the community backlash, but it wasn't the only platform affected during the crash. Other major exchanges, including Coinbase and Robinhood, also reported service interruptions.

Coinbase's Bitcoin trading activity also drew scrutiny, but there was no conclusive evidence linking it to market manipulation or triggering the crash.

It is noteworthy that surveillance continued in the weeks following the crash. Some of the earlier claims were later reevaluated. One trader who publicly criticized Binance later retracted his claims.

The trader said that after reviewing technical data provided by the exchange, Binance's logs did not indicate any system errors. He later deleted the original post, saying he did not want to contribute to the spread of unverified information.

“My main argument was that ‘the API order failed and the reduce-only order returned a 503 error.’” However, Binance’s technical team provided full logs during our meeting that showed that the reduce-only order did not result in a 503 error. An investment firm connected to my friend also joined the investigation. “The main account management team and their staff have reviewed the global logs and confirmed that there are no 503 errors on reduction-only orders,” the post reads.

Why the Binance rally resurfaced in January 2026

After a while, the dust seemed to settle. Then 2026 arrived, and suspicions flared up again. This had a lot to do with the performance of the crypto market in the months after October.

The market remained under pressure after a major deleveraging event. Bitcoin and Ethereum gave up all of their gains in 2025 and ended the year in the red. Market experts increasingly point to the October crash as the main reason for the sector's weakness.

“While the industry is limping along with massive deleveraging at some exchanges and market makers, fundamentals have improved significantly,” said Bitmine Chairman Tom Lee.

The debate has intensified following recent comments from Ark Invest CEO Cathie Wood. In a recent interview with Fox Business, she said:

“What we have experienced in the last couple of months is the aftermath of October 10th…October 10th…a flash crash associated with a software glitch on Binance that led to system deleverage totaling $28 billion and many people getting injured.”

Soon, numbers in other industries began to have an impact as well. OKX founder Star Xu commented that people were “underestimating the impact of 10.10” and claimed that the crash caused “real and lasting damage” to the crypto industry.

He said industry-leading companies should prioritize core infrastructure, trust with users and regulators, and the long-term health of the ecosystem. Although he did not mention specific companies, Xu contrasted that ideal with what he described as an increasingly focused focus on short-term profits.

“Instead, some have chosen to pursue short-term profits, repeatedly launching Ponzi-like schemes, amplifying the ‘get-rich-quick’ narratives of a few, and directly or indirectly manipulating the prices of low-quality tokens to lure millions of users into assets closely tied to them. This is their shortcut to attracting traffic and user attention. Legitimate criticism is then drowned out not by facts or accountability, but by aggressive narrative control and coordinated influencer campaigns. ” added the executive.

Binance faces accusations from traders

Market watchers began disseminating information purporting to be evidence of fraudulent activity on Binance.

In a post on X (formerly Twitter), Star Platinum pointed to Binance's October 6th announcement that it had updated its pricing sources for BNSOL and wBETH, with the update scheduled for October 14th.

Additionally, Star Platinum claims that more than $10 billion was moved in the 24-48 hours leading up to the event, including massive USDT and USDC inflows into the exchange's hot wallets.

Analysts also emphasized $USDe Flows associated with wallets labeled as linked to Binance. Analysts contrasted Binance's situation with that of Coinbase, saying:

“Coinbase was not listing weak links ($USDe / wBETH / BNSOL) but did two things: Moved 1,066 $BTC From cold to hot minutes before the cascade ($130 million in pre-crash prices). During the decline, the large flows that could not be filled by Coinbase appear to have flowed out through market makers (Prime-style diversions). Coinbase's cbETH peg is holding. Binance's wBETH has collapsed. ”

Star Platinum also noted that major market-making companies such as Wintermute and Jump appear to have limited activity. $USDewBETH, and BNSOL occurred during a period of extreme volatility.

“While Binance is marking collateral from those books, placing bids on those books will exhaust the liquidation engine itself,” the analyst said.

They also claim to have established new accounts with a notional amount of approximately $1.1 billion. $BTC and $ETH During the last two hours before the crash, he wore shorts, one of which $ETH The position increased approximately one minute before the critical post, generating an estimated profit of $160 million to $200 million.

Another user accused Binance of manipulating liquidation timestamps. According to users, Binance announced after the crash that it would compensate eligible liquidations that occurred after 05:18 (UTC+8).

However, the trader states that his liquidation was recorded on the platform at 05:17:06, just outside the qualifying period.

The trader claims that this timestamp is inconsistent with an automated system email that shows the liquidation trigger time as 05:20:08 (UTC+8), a difference of approximately 3 minutes.

“This automatically generated, tamper-proof email is the most iron-clad proof. It is the heart of cryptography. Code is law,” the post states.

Alleges that users manipulated Binance timestamps. Source: X/Mr_CryptoWhale

Meanwhile, Binance's own statement refers to a different time frame.

“All futures, margin, and loan users who held USDE, BNSOL, and WBETH as collateral and were affected by Depeg between 21:36 and 22:16 UTC on October 10, 2025 will be compensated, along with any clearing fees incurred,” the exchange said.

Cryptocurrency Twitter comes under fire over claims of “scammer” against CZ

As these claims spread, it didn't take long for the tone on social media to escalate. Users began sharing lengthy posts labeling CZ a “scammer” and accusing it and Binance of systematically abusing their market dominance to the detriment of competitors and retail traders.

Multiple posts gained traction and several went viral as community members amplified the claims and expressed their support. As involvement proliferated, the allegations began to feature repeatedly on crypto Twitter timelines.

In an interview with BeInCrypto, NoOnes CEO Ray Youssef described Binance as a US-aligned vehicle for what he called a “controlled disruption” of the cryptocurrency market.

Mr. Yousef suggested that Mr. Zhao is aligned with the US establishment, which he characterizes as the real power currently influencing the direction of Binance.

For Youssef, Binance's growing ties to the United States is a cause for concern. He argued that the exchange could become a controlled asset and could ultimately be used to cause or accelerate a widespread market collapse.

“Binance is becoming the next FTX, or what FTX should be…When CZ burst the FTX bubble, the damage was basically 1% of what the state was planning. Now they are trying to use Binance to make the corpse explode in front of our eyes,” Yousef told BeInCrypto.

Criticism also extends to Mr. Zhao's recent comments on the buy-and-hold strategy.

“I have seen many different trading strategies over the years, and very few can beat the simple 'buy and hold' that I do. This is not financial advice,” CZ wrote.

This statement sparked an immediate backlash. Critics point to the performance of the tokens listed on Binance, claiming that many have lost significant value and questioning whether the buy-and-hold approach is realistic for retail users.

“The biggest fraudulent exchange ever shut down, all projects should apply to Binance for delisting,” the analyst argued.

However, the vulnerability was not exchange-specific, according to BeInCrypto's report. Crypto tokens listed on major platforms in 2025 have generally struggled to maintain positive price performance.

This trend held regardless of exchange and reflected an overall market downturn rather than an issue related to a single trading venue.

That's not all. Users also accused Binance today of selling Bitcoin during the market crash.

Binance and CZ issue response amid backlash against virtual currency Twitter

Nevertheless, as the backlash grew, Binance shifted to playing to its strengths. The exchange announced plans to convert the entire $1 billion reserve of its Safe Assets Fund for Users (SAFU) from stablecoins to Bitcoin over the next 30 days.

In an open letter to the community, Binance stressed that it “adheres to high standards” and “continuously improves based on feedback” from users and the broader public.

The exchange revealed that it will continue to invest in risk management, compliance and ecosystem development in 2025, listing a series of highlights below.

• Binance announced that it helped recover $48 million from 38,648 fraudulent user deposits.
• It added that it helped 5.4 million users and prevented an estimated $6.69 billion in potential fraud-related losses.
• He said cooperation with law enforcement agencies contributed to the seizure of $131 million in illicit funds.
• We noted that spot listings in 2025 spanned 21 blockchains, led by Ethereum. $BNB Smart Chain and Solana.
• It reported a total of $162.8 billion in proof of reserves across 45 crypto assets.

I also received a personal reply. CZ has spoken out publicly and dismissed the recent allegations as a common cycle.

“This isn't the first time, and it won't be the last. We've been under FUD attacks since day one. We're going to address this in tonight's AMA and look below the surface at why and how,” he shared.

The new scrutiny on Binance reflects multiple events and a series of allegations. This highlights how fragile trust in cryptocurrencies remains after years of volatility, leveraged crashes, and high-profile failures.

In situations where market recovery is still difficult, unanswered questions tend to resurface.

The post Binance Playbook: Why Crypto Twitter hates the biggest exchange appeared first on BeInCrypto.