CZ Addresses Binance's Role in October 2025 Market Crash

TLDR

• Binance compensated users with approximately $600 million after the crash.
• The market crash erased over $1 trillion in total market capitalization.
• CZ emphasized Binance's operational integrity during the market turbulence.

Changpeng "CZ" Zhao, the founder of Binance, recently addressed allegations linking the cryptocurrency exchange to the October 10, 2025, market crash. The crash resulted in the liquidation of $19 billion in leveraged positions. While speaking as a shareholder and user during a Q&A session on Binance's social media platforms, CZ refuted the claims, describing them as "paid attacks" and "twisted FUD" from low-follower accounts and paid influencers.

CZ, who co-founded Binance in 2017, navigated the platform to become the world's largest cryptocurrency exchange by trading volume. He served as CEO until 2023, when he stepped down following a guilty plea to U.S. anti-money laundering violations. Despite his resignation, he remains a significant shareholder and an influential figure within the company. During the recent Q&A, he clarified that the crash was not due to Binance's system or actions, citing a simultaneous industry-wide surge in trading volume caused by a tariff announcement.

Compensation to Affected Users

To address glitches and liquidity issues, Binance compensated affected users with approximately $600 million. The compensation included $300 million allocated to individual traders and $100 million provided to institutions, specifically for platform glitches and liquidity concerns. Additionally, $283 million was devoted to addressing a USDe depreciation on Binance.

The affected assets, such as Bitcoin (BTC) and Ethereum (ETH), witnessed significant depreciation during the crash. BTC plummeted from over $126,000 to below $80,000, and over $1 trillion was erased from the total market capitalization. Leveraged positions across the market suffered $19 billion in losses, with notable depegging of Ethena's USDe stablecoin to $0.65 on Binance due to an internal oracle issue.

Context and Historical Comparisons

The October 10th crash mirrors previous flash crashes, including the May 2022 Terra/LUNA collapse, which led to over $40 billion in losses, and the March 2020 “Black Thursday” Bitcoin liquidation event amid COVID-19 market shocks. These events were extensively amplified by factors such as panic selling, automatic deleveraging, and liquidity crunches without attributing blame to any single exchange.

With the depegging impact confined to Binance, no immediate institutional or regulatory updates have been announced. According to the founder of Ethena Labs, the USDe depegging was a Binance-specific occurrence. In the aftermath, Binance continues to undergo monitoring by both Abu Dhabi's financial regulators and the United States, ensuring adherence to legal and operational standards.

CZ's Reassurances and Industry Sentiments

During the Q&A session, CZ emphasized the baseless nature of accusations linking Binance to the market crash and urged individuals and industry participants to avoid harboring misleading perceptions. He expressed skepticism toward specific market narratives, reinforcing Binance's operational integrity during the market turbulence.

"If you're entrenched in such a mindset, it's unlikely you'll find success in the future."

CZ, Founder, Binance

Binance’s transparency and subsequent actions aim to restore trust and confidence among users and stakeholders. In light of recent market events, the exchange continues to focus on safeguarding its users’ interests through proactive measures and communication. This steadfast commitment to transparency demonstrates Binance's resilience amid unpredictable market conditions. For more detailed legal context about the exchange's operations, further information is available in this trademark case document.