Binance CEO denies selling Bitcoin to stabilize BNB price.

Recently, the largest global crypto exchange, Binance, and its American arm, Binance.US, have been hit with a lawsuit by the United States Securities and Exchange Commission (SEC). As a result, the company’s US market share has drastically decreased to around 78%, as market makers and traders have left due to regulatory pressure in the country. Despite these challenges, Binance CEO Changpeng Zhao (CZ) has denied claims of market manipulation and undisclosed Bitcoin (BTC) sales, which were allegedly aimed at artificially stabilizing the value of BNB, Binance’s native token.

In response to these allegations on Twitter, CZ dismissed the accusations, stating that the exchange had not sold any of its BTC or BNB holdings. He also revealed that the company still had a significant amount of FTT tokens, the native crypto of the now-defunct company FTX, which declared bankruptcy last year.

The accusations of market manipulation arose from speculations on social media that Binance and CZ had been selling “spot BTC at an alarming rate to defend the BNB’s $220 liquidation”. Despite these allegations, CZ expressed his amazement that Binance could manipulate the market, questioning the basis for such conclusions drawn from a price chart involving millions of traders.

Several market analysts, including Dylan LeClair and Cory Klippsten, CEO of Swan Bitcoin, have also voiced concerns about Binance’s alleged activities in manipulating the market to artificially inflate the BNB’s value. LeClair described the BNB market as “clearly a fake market”, alleging that its trading volume is less realized than BTC. Klippsten claimed that Binance is engaging in wash trading, a type of scam that involves the artificial inflation of trading volumes by executing fake buy and sell orders.

Another analyst, Joe Consorti from The Bitcoin Layer, also found the price action of BNB to be unusual, particularly around the $220 level, which seemed staunchly defended. He suggested that this level may be a liquidation point for BNB-collateralized loans.

Commenting on CZ’s statement that Binance did not engage in market manipulation practices, Consorti emphasized the need for the exchange to publish audited information that proves the absence of BNB-collateralized liabilities. He believes that such transparency is essential to dispel the FUD (fear, uncertainty, and doubt) surrounding the allegations.

Meanwhile, the crypto market has reacted negatively to the news of the SEC’s lawsuit against Binance, CZ, and Binance.US, alleging that the company’s crypto assets, BNB and BUSD, are security products. As a result, BTC and ether have both experienced significant drops, causing investors to lose their funds as the market dwindles.