Binance CEO Changpeng Zhao (CZ) acknowledged a little-known X (formerly Twitter) user for dispelling rumors of internal turmoil at Binance. The rumors suggested that Binance was selling its Bitcoin reserves to protect the price of its native token, BNB. The rumors were related to a vulnerable BNB collateralized DeFi loan on Venus protocol that was approaching liquidation.
The loan in question began with BNB Chain’s 2 million hack in October 2022, during which a hacker created 2 million BNB out of thin air. The hacker then deposited 900,000 stolen BNB into Venus and borrowed $150 million worth of USDT and USDC stablecoins. This posed a risk of liquidation if the price of BNB were to suddenly drop, potentially causing a market crash.
However, CZ clarified that Binance did not fund BNB Chain’s recent loan repayment, as the exchange and the blockchain network are separate entities. He also pointed out that selling $30 million in BTC to fund the loan would not have had a significant impact on Bitcoin’s price. CZ suggested that some “influencers” may be spreading these theories for engagement and financial gain.
In conclusion, the allegations of Binance dumping Bitcoin to defend BNB have been addressed and debunked. It is clear that the rumors were unfounded, and Binance remains committed to its operations.
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