There’s a rumour going around Twitter claiming that Binance has been secretly selling Bitcoin to keep its BNB token afloat. Binance chief executive officer Changpeng Zhao has quickly dispelled the speculation, proclaiming that no BTC or BNB trading activity is happening behind the scenes.
CZ Rebukes Claims Of Secretly Selling BTC To Prop Up BNB
On Tuesday, popular crypto trader going by the online alias 52kskew accused Binance of intentionally manipulating the market to keep the prices of BNB from dropping below certain levels.
“USDT reserves have been pumped into BNB aggressively since 27th May. BNB is being sold off for BUSD to suppress volatility in BTC,” 52kskew astutely noted. “BUSD is pumped into BTC to suppress downside volatility so BTC can be swapped out for USDT.”
Similarly, trader JW100x claimed that Binance is determined to keep the price of BNB above $220 at all costs to prevent a “liquidation waterfall”. JW100x described the practice of selling spot Bitcoin to stabilize the value of BNB as a “total house of cards”, pointing to the potential for market destabilization.
Joe Consorti, a market analyst at The Bitcoin Layer, also described BNB’s price action as “unusual”, with the “$220 level” being “staunchly defended.” He indicated that it might be a liquidation zone for a BNB-collateralized loan.
CZ felt compelled to quickly respond to these allegations on Twitter, dismissing them as FUD via his infamous “4” moniker. For those who don’t know, FUD stands for “fear, uncertainty, and doubt.” The crypto community has long used the pejorative to portray what they deem as misconceptions or exaggerations circulated by crypto foes to scare off investors, regulators, and the general public.
According to the Binance boss, Binance has not sold any BTC or BNB. He added that the exchange still holds a bag of the FTX (FTT) token, a popular crypto asset issued by the now-defunct FTX digital asset exchange.
Zhao further accused the Crypto Twitter members of supposedly spreading the rumours of self-serving intentions: “Maybe they are shorting… who knows.”
Fresh Binance FUD Or Facts?
CZ’s emphatic rebuff, however, has been met with harsh skepticism from the cryptoverse, with Consorti prompting Binance to publish an audited statement proving that it doesn’t have any BNB-collateralized liabilities in order for the FUD to go away.
In the highly volatile crypto world, such grave allegations could shake market confidence and attract further regulatory scrutiny. Notably, the rumours come as the global exchange is mired in a legal spat with the U.S. Securities and Exchange Commission (SEC) over allegations of considerable malfeasance and federal securities violations at its Binance.US unit.
Earlier today, a federal judge refused to order a temporary restraining order freezing Binance.US’s assets. This will allow the U.S. arm of the firm to continue doing business while hashing out limitations with the agency.
Whether Binance will provide evidence to corroborate CZ’s claims or if these allegations will further taint the company’s reputation remains to be seen.
