Rumours spread on social media that the cryptocurrency exchange Binance had allegedly sold its Bitcoin holdings to defend its BNB positions.
Binance and CZ have been selling spot Bitcoin at an alarming rate, to defend the $BNB $220 liquidation waterfall
As spot Bitcoin is sold off, BNB is purchased, which defends the $220 liquidation but also caps the upside potential of Bitcoin
It is a total house of cards pic.twitter.com/ils8nsQiXd
— JW (@JW100x) June 13, 2023
“As spot Bitcoin is sold, BNB is purchased, which defends it from liquidation at the $220 level, but also limits Bitcoin’s upside potential. This is a true house of cards,” JW wrote.
Another user, going by the handle Skew, confirmed the speculation. In his view, the trading platform sells Bitcoin for USDT and funnels the proceeds into BNB. The latter is then sold for BUSD, which is redirected into Bitcoin to “suppress its downside volatility.”
Can confirm this is true,
Looks like BTC is being sold off for USDT reserves
USDT reserves are being pumped into BNB aggressively since 27th May
BNB is being sold off for BUSD to suppress volatility in BTC
BUSD is pumped into BTC to suppress downside volatility so BTC can be… https://t.co/yZ4VEtOjuR pic.twitter.com/MIYkLcvfOX
— Skew Δ (@52kskew) June 13, 2023
“Technically this is market manipulation; Binance is definitely up to something to prevent a collapse of BNB and BTC,” he added.
Changpeng Zhao, head of the exchange, responded to the rumours on Twitter. He said the company had not sold either Bitcoin or BNB. According to him, the platform still holds the tokens of the collapsed cryptocurrency exchange FTX (FTT).
4. Binance have not sold BTC or BNB. We even still have a bag of FTT.
It is amazing they can know exactly who sold based on just a price chart involving millions of traders. FUD. ?♂️ pic.twitter.com/M3MUH2bFRE
— CZ ? Binance (@cz_binance) June 13, 2023
“It’s remarkable that they can identify the seller’s identity so precisely from a price chart involving millions of traders. FUD,” Zhao added.
On June 5, the U.S. Securities and Exchange Commission filed suit against Binance and its CEO. The regulator brought 13 counts, including allegations of selling unregistered securities. Later the Commission filed a similar suit against Coinbase.
In response, Binance issued a statement saying it was prepared to vigorously defend itself.
The U.S. arm of the exchange opposed the SEC’s emergency motion to freeze assets, calling it “draconian and unduly burdensome.”