Rumors emerge on X claiming Binance is issuing legal threats, including cease-and-desist notices, against users criticizing its role in the Oct. 10, 2025 “10/10” flash crash, which saw over $1B in liquidations linked by critics to USDe leveraged products. Influencers like Leonidas say some threats are real, while Binance denies others as forgeries meant to spread misinformation.
Co-founder Changpeng “CZ” Zhao has dismissed the claims as FUD, saying Binance welcomes constructive criticism, even as the exchange faces increased scrutiny and lawsuits related to losses from the crash.
High Signal Summary For A Quick Glance
- The rumors suggest Binance may respond aggressively to public criticism, though many claims remain unverified.
- The controversy is tied to the 10/10 flash crash and the USDe backlash, while Binance’s core operations and platform functionality remain intact.
- Near-term volatility is likely, but historical precedent shows markets often stabilize as verifiable facts replace FUD.
- Retail traders: May avoid sharing criticism publicly due to fear of legal action or retaliation.
- Long-term holders: Confidence in Binance and BNB could weaken, prompting portfolio rotation or risk reduction.
- Institutions: May reassess reliance on Binance due to reputational and legal risk considerations.
- Builders & influencers: Perceived censorship pressure can reduce open feedback loops, harming transparency and innovation.
How the 10/10 Flash Crash Put Binance Under Fire
Rumors on X claim Binance has been sending legal threats, including cease-and-desist notices, to critics who blamed the exchange for the October 10, 2025 “10/10” flash crash that wiped out billions through liquidations. Much of the criticism centers on Binance’s handling of USDe in its wealth products, which some users say encouraged risky trading during extreme volatility. While Binance has denied issuing fake notices and called some documents forgeries, influencers like Leonidas say they have confirmed real cases of legal warnings tied to these discussions.
Binance co-founder Changpeng “CZ” Zhao has dismissed the claims as FUD, saying the exchange welcomes fair criticism, but the issue has gained traction due to Binance’s past responses to controversy. Similar disputes in recent years, including legal threats over criticism and major regulatory cases, have caused short-term drops in BNB and negative sentiment before markets stabilized. Still, repeated incidents have kept Binance under close scrutiny, making investors more cautious even when prices recover.
Key milestones in Binance’s regulatory battles and post-FTX controversies
FTX collapse and CZ backlash
CZ’s public criticism of FTX accelerates its collapse, triggering accusations that Binance uses aggressive tactics against competitors and critics.
CFTC files lawsuit
The U.S. Commodity Futures Trading Commission sues Binance and CZ for operating unregistered platforms and failing AML compliance.
SEC brings 13 charges
The SEC files charges against Binance, alleging unregistered securities offerings, commingling, and misleading investor disclosures.
$4.3B DOJ settlement
Binance reaches a $4.3B settlement with the U.S. Department of Justice over AML violations; CZ steps down as CEO.
SEC lawsuit dismissed
The SEC drops its case against Binance, closing one of the last major enforcement actions from earlier regulatory crackdowns.
“10/10” flash crash
A severe market crash wipes out over $1B in leveraged positions, with critics blaming Binance’s handling of USDe products.
Legal threats over listing-fee claims
Binance threatens legal action against users alleging excessive token listing fees, escalating backlash after the crash.
Wintermute lawsuit surfaces
Reports claim market maker Wintermute sues Binance over hundreds of millions in losses tied to the 10/10 event.
User threats publicly confirmed
Influencer Leonidas confirms Binance issued cease-and-desist letters to X users criticizing the exchange over the 10/10 crash.
Community Reactions
Crypto users on X and forums have reacted strongly, with many seeing the rumors as Binance overstepping and worrying about limits on free speech after the 10/10 crash. This anger has led to boycott calls and closer scrutiny of centralized exchanges, though community notes have also flagged some claims as misleading, showing a clear split in opinion.
Influencers like Leonidas have shared cases they say are real, increasing FUD and pushing users to diversify, while Binance supporters defend the exchange, pointing to its size and past recoveries. Overall, the debate has widened into a broader discussion about accountability in crypto and growing interest in decentralized options.
What Readers Should Watch Next
- Binance’s Official Updates: Monitor Binance’s blog or X announcements for any clarifications on the alleged cease-and-desist notices, as CZ has already labeled them FUD but further denials or admissions could shift sentiment.
- BNB Price Movements: Track BNB’s performance in the coming weeks, given historical 5-10% dips from similar controversies, with potential rebounds if the exchange provides proof-of-reserves or transparency reports.
- Influencer and Community Reactions: Follow key X figures like Leonidas for updates on verified threats, as escalating stories could amplify FUD or lead to coordinated user actions like mass withdrawals.
- Related Lawsuits: Keep an eye on ongoing cases, such as Wintermute’s suit over 10/10 losses or the FTX estate’s claims against CZ, which might intersect with these rumors and impact Binance’s operations.
- Broader Crypto Sentiment: Observe if this sparks similar criticisms of other exchanges like Coinbase or Kraken, potentially signaling a trend toward stricter self-regulation or free speech debates in the industry.
