Rumours have been swirling around the cryptocurrency market, suggesting that Binance, led by CEO Changpeng “CZ” Zhao, has been involved in undisclosed Bitcoin (BTC) sales with the intention of propping up the value of its native token, BNB (BNB).
Multiple market commentators have voiced concerns, accusing Binance of deliberate manipulation tactics aimed at artificially inflating the price of BNB, sparking a heated debate within the cryptocurrency community.
However, CZ swiftly dismissed the allegations in a tweet, vehemently denying any secret Bitcoin sales by Binance. He expressed his astonishment at the suggestion that individual sellers could be identified solely based on a price chart involving millions of traders. CZ dismissed the rumours as fear-mongering and aimed to create uncertainty in the market (FUD).
The speculation gained momentum after technical analysis platform Skew published a post on June 14, accusing Binance of market manipulation through a series of trades involving BTC, BNB, and Tether. Skew’s post suggested that Binance was actively involved in activities to prevent a sharp decline in both the value of BNB and BTC.
In response to Skew’s allegations, Bitcoin analyst LeClair chimed in, stating that the BNB market appeared to be “clearly a fake market” with lower trading volume compared to BTC. Another analyst, Klippsten, alleged that Binance was engaging in “wash trading,” claiming that the exchange was attempting to create a false impression of support for BNB. Wash trading is a manipulative tactic wherein an asset is sold and subsequently repurchased shortly after to inflate its demand or generate the appearance of heightened activity in the marketplace.
The United States Securities and Exchange Commission (SEC) recently filed a lawsuit against Binance.US. The suit alleges that Binance.US violated securities laws and engaged in wash trading through its undisclosed “market making” trading firm, Sigma Chain, which is owned by CZ.
CZ and Binance.US have staunchly refuted any allegations of wrongdoing and have committed to vigorously defending themselves against the charges in the U.S. District Court in Washington, D.C.
