Binance’s CZ denies industry rumors over BitMEX and COVID crash

Changpeng Zhao came to the defense of the crypto exchange again, dispelling a rumor that Binance traded on the derivatives trading platform BitMEX and made 60,000 BTC off of client funds during the pandemic.

The former Binance chief executive issued a response on X after user @ThinkingUSD claimed Binance was the most profitable entity on BitMEX during the March 12, 2020, market collapse. The trader told his followers the crypto exchange earned over $240 million by hedging customer positions, the largest withdrawal and highest PnL on the platform to date. 

Zhao dismissed the accusation, writing: “Fake news. They are just making things up randomly now. Not sure what their goal is. I feel bad for the people believing this without seeing any proof.”

Zhao: Binance did not trade on BitMEX

According to the ex-Binance CEO, the trading platform has never traded on BitMEX. Zhao mentioned the derivatives exchange’s co-founder, Arthur Hayes, propounding that “his friend” would know if such profits and withdrawals were made. He added that BitMEX processes withdrawals only once daily, which would make the allegation implausible.

4. Fake news. They just making things up randomly now. Not sure what their goal is. I feel bad for the people believing this without seeing any proof. 😂

Binance never traded on BitMex. @CryptoHayes (a friend) would know. BitMex processes withdrawals only once a day (as far as I… pic.twitter.com/qFBiyE1Lji

— CZ 🔶 BNB (@cz_binance) February 13, 2026

Responding to another comment under his post, Zhao suggested the accuser may have spread the rumor to attract, in his words, “not-so-sophisticated” users to their own platform.

In March 2020, bitcoin plunged from about $8,000 to nearly $3,800 within half a day. The drop triggered a liquidity crisis on exchanges, as buy orders failed to absorb the selling pressure. BitMEX, then one of the most active derivatives exchanges, saw $750 million in bitcoin liquidated on the platform within minutes.

On the stock market front, the Dow Jones Industrial Average fell more than 2,000 points in intraday trading. The S&P 500 dropped 7.6%, oil prices slipped by 22%, and yields on 10-year and 30-year US Treasury bonds fell below 0.40% and 1.02%, respectively.

About two months later, the US Department of Justice sentenced Arthur Hayes to six months of home detention for violating the Bank Secrecy Act. The New York Southern District Court found Hayes guilty of failing to implement and maintain anti-money laundering compliance laws at BitMEX.

Because of the platform’s lack of know-your-customer procedures, prosecutors believed the extent of its misconduct may never be known. BitMEX later settled with the US Department of the Treasury by paying $100 million, although it neither admitted nor denied conducting more than $200 million in suspicious transactions.

Allegations against Binance are all FUD, Zhao insists

Zhao’s latest rebuttal came at a time when Binance is dealing with a flurry of negative comments, piling up since October last year. At the start of February, he refuted claims that the train platform dumped bitcoin to kickstart a weekend selloff that pushed prices below $75,000. Some members of the crypto community suggested Zhao had single-handedly “canceled the supercycle.”

Zhao also denied reports that Binance sold $1 billion in bitcoin to drive the price down to $60,000, insisting that the bitcoin sales discussed on social media were made by users trading on the platform.

“Binance’s wallet balance only changes when users withdraw. Most users keep their balance with Binance and use Binance as a wallet.”

CZ

He also defended the pace of Binance’s plan to convert its SAFU reserves from stablecoins into bitcoin within 30 days, announced at the end of January. Zhao said purchases would likely occur in batches rather than through decentralized exchanges. 

“You won’t see them buying using a decentralized exchange (DEX). Binance is a CEX with the best liquidity in the world,” he wrote on X.

As reported by Cryptopolitan on Thursday, the exchange completed the final tranche of its emergency reserve strategy. It purchased 4,545 bitcoins, worth approximately $305 million, for SAFU to conclude its plan to convert $1 billion of funds from stablecoin reserves into 15,000 BTC.

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