For many years, Binance has been viewed as the giant dominating the crypto market. However, many accusations from the community, on-chain analysts, and legal documents suggest that the exchange's operations have some controversial points. Here are the main arguments often mentioned:
1. Role in the collapse of FTX
Many opinions suggest that CZ's public sale of a large amount of FTT in November 2022 accelerated the decline of the competitor's exchange.
Steps such as:
Announcement of selling 500 million USD FTT on the open market
Signed but withdrew from the acquisition agreement of FTX just 24 hours later
… considered strong blows to FTX, which is facing internal issues.
2. The “price error” incident led to mass liquidations (10/10)
Another controversial event is Binance's pricing system causing USDe to lose its peg on the exchange while remaining stable elsewhere.
The consequence is:
User collateral was misvalued
A series of accounts were liquidated in a very short time
Some market makers accuse that they were pressured when publicly addressing the issue
3. Allegations regarding the “listing tax” mechanism for new projects
A project CEO believes that Binance requires:
8% of the total token supply
A minimum deposit of several million USD
And there is a possibility of selling that amount of tokens on the market, affecting retail investors