With multiple traders accusing Binance and other CEXs of fueling the crypto crash, the exchange replies with a technical answer. While the reply now accuses traders as misunderstanding data, controversy remains heated around Binance.
By Vishal Dixit
Edited by Julia Sakovich
Updated
3 mins read
Binance, the biggest cryptocurrency exchange in the market, has finally made a response to traders accusing the exchange of manipulating the market. The exchange has been facing multiple accusations regarding dumping millions of Solana SOL $129.9 24h volatility: 5.6% Market cap: $66.45 B Vol. 24h: $3.94 B and Ethereum ETH $1 906 24h volatility: 4.7% Market cap: $229.83 B Vol. 24h: $19.23 B tokens through Wintermute, a crypto market platform that provides liquidity to centralized exchanges and decentralized financial applications.
In a recent post shared by the Binance customer support account, Binance has made an official reply to a trader questioning the on-chain data. The data revealed Binance’s hot wallet sending millions of Solana (SOL) and Ethereum (ETH) tokens to Wintermute.
The transfer occurred on February 24, and the market witnessed a major correction, dropping the total crypto market cap from $3.14 trillion to $2.93 trillion. While the total crypto market cap fell by nearly 7%, the transfer from the largest crypto exchange raised multiple eyebrows.
Following the major market downturn, multiple traders accused Binance of dumping on everyone by transferring the tokens to liquidate via Wintermute. In response to the accusations, Binance has denied dumping or selling tokens during the market crash.
The centralized exchange is shifting the dynamics towards traders simply misunderstanding the on-chain transactions that are linked to the Wintermute market maker.
In a recent post, Binance stated
“As an exchange, we simply help users match trades, and we have no visibility into our users’ decisions, including market makers who may move their assets according to their strategies.”
Along with denying the accusations, Binance has warned multiple traders to avoid jumping to conclusions based on a screenshot of transactions. As the broader market witnesses high volatility, Binance also urges users to recognize tactics that spread fear, uncertainty, doubt (FUD) in the crypto market.
These sudden surges in FUD sentiments could lead to a major crash in the broader market.
On February 24, data from Arkham Intelligence showcased Binance moving at least 103,570 SOL tokens worth $16.32 million at the time. Additionally, the on-chain data revealed exchanges moving 25,000 ETH tokens worth $80 million at the time to the market maker Wintermute.
This sudden shift in holdings was interpreted as Binance selling or dumping these tokens by multiple traders, further fueling speculation.
The sudden transfer led to multiple traders and investors assuming that Binance was preparing for market volatility and dumping Solana and Ethereum. Just a day later, the broader market collapsed, with Bitcoin BTC $84 450 24h volatility: 3.2% Market cap: $1.68 T Vol. 24h: $33.64 B falling below the $90,000 mark and total liquidation in the market rising to $1.5 billion.
At the time, traders accused Binance and other major centralized exchanges of manipulating the market.
Market makers are entities that provide liquidity to centralized exchanges or decentralized finance applications. These entities help in placing buy and sell orders, tightening bid-ask spreads, and enabling overall smoother trading activity.
They are extremely crucial in the market to absorb large orders and help reduce price volatility. Hence, exchanges like Binance and others often partner with market makers by providing them with bonuses or incentives.
Disclaimer: Coinspeaker is committed to providing unbiased and transparent reporting. This article aims to deliver accurate and timely information but should not be taken as financial or investment advice. Since market conditions can change rapidly, we encourage you to verify information on your own and consult with a professional before making any decisions based on this content.
Vishal, a Bachelor of Science graduate, began his journey in the crypto space during the 2021 bull run and has since navigated the subsequent market winter. With a strong technical background, he is dedicated to delivering insightful articles rich in technical details, empowering readers to make well-informed decisions.
