CZ Responds to Binance Blame After Record $19B Crypto Market Crash

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Changpeng Zhao (CZ) has rejected claims that Binance was responsible for the massive $19 billion crypto market crash seen last October, calling the accusations exaggerated and disconnected from reality. Speaking during a live AMA session on Binance’s platform, the former CEO said it was “far-fetched” to pin such a historic liquidation event on a single exchange, arguing that broader market forces were at play during the sell-off.

The crash, which occurred on October 10, marked the largest single-day liquidation event in crypto’s history, wiping out leveraged positions across multiple platforms as volatility spiked sharply.

What Actually Happened in October

A wave of forced liquidations drove the turmoil as prices moved sharply against highly leveraged traders. With liquidity drying up, even minor price gaps quickly escalated, setting off a chain reaction of selling across the market. Several exchanges, including Binance, faced heavy technical strain as trading activity spiked, which further unsettled investors and added to the panic.

Afterward, users pointed to system glitches and pricing mismatches, fueling criticism that exchange infrastructure may have worsened the crash. Zhao pushed back on that view, saying the issues were quickly resolved and insisting they did not mean Binance caused the broader market collapse.

Binance’s Response and Compensation

In the aftermath, Binance compensated affected users and businesses roughly $600 million for losses linked to platform-related issues. Zhao highlighted this payout as evidence of accountability rather than guilt, stating that customers were made whole and operational weaknesses were fixed.

He also pointed out that Binance currently operates under regulatory oversight in Abu Dhabi and remains subject to U.S. monitorship, suggesting that multiple authorities are closely scrutinizing the exchange’s systems and controls.

Regulatory and Political Backdrop

Zhao’s comments come as Binance continues to navigate an evolving regulatory landscape. He was pardoned by former U.S. President Donald Trump in 2025, and reports suggest Binance may soon reach an agreement to remove its compliance monitor requirement. These developments have renewed attention on Binance’s role in global markets and its exposure across jurisdictions.

Critics Say Questions Remain

Not everyone is convinced by Zhao’s defense. Some market observers argue that the $600 million compensation itself confirms that something went wrong during the crash. While payouts may have reduced the risk of class-action lawsuits, critics say deeper issues around systemic fragility, leverage, and exchange infrastructure remain unresolved.

From this perspective, the October event was less about individual blame and more about structural risks embedded in today’s crypto markets.