Several critics claimed that Binance was "wash trading" BNB.
The allegation that Binance, under the direction of CEO Changpeng "CZ" Zhao, has been discreetly liquidating Bitcoin (BTC) holdings to bolster its native token, BNB, has been dismissed by the CEO himself.
Various market observers have fanned the flames of speculation, insinuating that Binance's actions are aimed at falsely augmenting the valuation of BNB. High-profile skeptics like Dylan LeClair, an analyst, and Cory Klippsten, CEO of Swan Bitcoin, have been at the forefront of these speculations.
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In a forceful rebuttal on June 13th, CZ firmly dismissed claims of Binance liquidating its Bitcoin and BNB reserves. He emphasized Binance's retained FTX Token (FTT) holdings, the indigenous token of the now-defunct crypto exchange, FTX.
Skew, a technical analysis platform, leveled serious accusations at Binance on June 14th. The company claimed that Binance was intervening in the market using a sequence of trades involving BTC, BNB, and Tether (USDT) to maintain BNB's price stability.
Binance is definitely up to something here to prevent BNB from crashing as well as BTC.
Klippsten insinuated that Binance was "wash trading," a manipulative tactic where an asset is sold and promptly repurchased to artificially create demand or the illusion of market activity.
Joe Consorti of The Bitcoin Layer perceived BNB's price movement as "unusual," noting the "staunch defense" of the "$220 level." He speculated that this could be a liquidation threshold for a loan collateralized by BNB.
Responding to CZ's dismissal, Consorti suggested Binance should provide a transparent, audited statement certifying that Binance is free of any BNB-collateralized liabilities to dispel the circulating fear, uncertainty, and doubt.
The accusations are particularly poignant given the recent lawsuit against Binance.US by the US Securities and Exchange Commission on June 5th. The lawsuit alleges violations of securities laws and wash trading through Sigma Chain, a "market making" trading firm allegedly owned by CZ.
