Sister Mu's speech became the trigger, Binance and CZ faced a rare reputation crisis

Author: Hu Tao, ChainCatcher

Nearly four months later, the impact of the 1011 incident continues to ferment, even bringing an unprecedented reputational crisis to Binance and its founder, Changpeng Zhao.

In recent days, the crypto-related timeline on social platform X has been flooded with numerous criticisms and attacks against Changpeng Zhao, with many KOLs labeling him a "fraudster," and he is widely perceived to have suffered a "collapse of persona" and "backlash from his own hype."

The incident originated from Cathie Wood's remarks on a television program on the 26th of this month, where she pointed out that the recent drop in Bitcoin's price was influenced by the $28 billion deleveraging event caused by Binance's software failure on October 10th. She analyzed that the current market selling pressure has basically ended, and as institutional investors focus on the turning point of the "four-year cycle," Bitcoin is expected to consolidate in the $80,000 to $90,000 range before ending its downward trend and regaining upward momentum.

In the previous 1011 incident, cryptocurrencies like Bitcoin experienced a sharp decline, with the total market capitalization of the global crypto market evaporating by over $500 billion, and the amount of leveraged positions liquidated exceeding $19 billion, marking it as the largest leveraged liquidation event in the history of the crypto industry. From numerous ordinary users to many well-known market makers and VCs, significant losses were incurred during this event. One mainstream view suggests that the occurrence of this incident is closely related to Binance's abnormal liquidation mechanism, and afterwards, Binance modified the K-line trends of certain cryptocurrencies that exhibited unusual fluctuations.

Due to Cathie Wood's profound influence and authority in both traditional finance and the crypto space, as well as being an early investor in Coinbase and Bitcoin, her remarks have brought the painful situation of the 1011 incident back into the view of many crypto users. In the current context of a persistently sluggish crypto market, her comments undoubtedly further aggravated the already fragile investor sentiment, leading to a wave of criticism from various industry figures in the English-speaking market.

Among the early voices, Leonidas, co-founder of Zap/Ord.io, was one of the most influential figures, vehemently stating on Twitter that Changpeng Zhao is not only the biggest cryptocurrency fraudster in history but also the biggest fraudster in human civilization. The world has never seen such large-scale fraud, manipulation, and corruption as what Binance is currently exhibiting. Send this person back to prison!

Crypto trader Anglio also tweeted that CZ is the culprit behind the 10/10 liquidation case. Just because he wanted to stifle HYPE, he ended up stifling his own space. CZ is a thorough criminal. The comments section is filled with similar tweets like "You defraud others, ruin people's lives, destroy the market, yet still pretend to be a good person."

The focus of these statements is centered on the 1011 liquidation event, asserting that Binance bears primary responsibility for this incident, yet has never publicly released an investigation report or acknowledged any issues. At the same time, many of the cryptocurrencies that Binance launched last year are in a state of significant decline, resulting in heavy losses for investors. Therefore, Changpeng Zhao, as the largest shareholder of Binance, has become the target of their criticism.

Perhaps due to Binance's long-term accumulation in maintaining relationships with KOLs, and the information bubble created by X's recommendation logic, such voices initially did not spread widely in the Chinese X circle. However, starting from the 28th, the immense negative energy accumulated in the English-speaking discussions inevitably spread to the Chinese X circle, and many well-known bloggers began to sharply criticize Binance.

Renowned crypto trader Chuanmu tweeted, asking when Binance would apologize and compensate all users from the 10.11 incident, stating that Binance has been shifting attention and remaining silent about that day while harvesting tens of billions of dollars in assets from users and market makers, turning the entire industry into a Dubai scam factory's assembly line!

OKX founder Xu Mingxing also tweeted on the 28th that this incident has caused real and lasting damage to the industry. Leading companies in the industry should focus on strengthening core infrastructure, building trust with global users and regulators, and protecting the long-term interests of the company.

However, Binance founder Changpeng Zhao and He Yi have dismissed all external criticisms. Changpeng Zhao first linked many negative tweets to organized attacks, pointing out that some previously unfamiliar accounts concentrated on posting highly similar content in a short time, exhibiting obvious characteristics of replication and amplification, suggesting that the overall behavior is closer to systematic operation rather than natural discussion.

Subsequently, Changpeng Zhao responded again to the criticism regarding the low quality of listed coins, stating that in any industry, most companies/projects will fail. A few successful cases will grow exponentially. No one can predict the future development of a project. Exchanges should try to give hardworking projects opportunities. Not every project on an exchange is one you should buy.

He Yi further connected these criticisms to changes in the era and conflicts of interest. "When pushing for change in the world, it is often accompanied by a lot of discussion, questioning, and differing voices. This is not unique to any one industry but is a recurring process in all structural changes throughout history." He Yi said, "The discussions surrounding the crypto industry and Binance are complex, stemming from emotional fluctuations brought about by market cycles, as well as differences in business competition and models."

Some KOLs also echoed the views of He Yi and Changpeng Zhao, such as Crypto Orange, who believes that this incident may be a stage in the competition between Eastern and Western crypto. Cathie Wood has always been the mouthpiece for Western capital, and her remarks are often bolder, more direct, and exaggerated. During Bitcoin's surge, she publicly shouted for a million dollars, fueling the trend. She acts like a signal flare; this time targeting Binance may also serve as a mouthpiece for some top Western capital.

However, in the current public opinion environment, completely shirking responsibility and attributing the problem solely to bot attacks and commercial competition has become a behavior that significantly lowers user goodwill. This not only fails to stop the related controversies but also amplifies investors' negative emotions, and discussions on the X platform continue to spread further.

In a persistently sluggish market, investors tend to seek outlets for their negative emotions. For a long time, figures like Changpeng Zhao, as the largest vested interests in the industry, have not adequately shouldered their responsibilities, merely calling on everyone to HODL on Twitter, while being controversial in areas such as coin listing reviews and industry ecosystem construction. Thus, under the ignition point, they quickly became the target of public attacks. However, demonizing Changpeng Zhao as the "biggest fraudster in the industry" while ignoring market cycles, user responsibility, and platform scale effects seems rather unfair.

Ultimately, in this still wild-growing stage of the track, in this high-volatility, strong-cycle investment market, no one is a pure "savior," nor is anyone an eternal "demon." Every investor should bear the final responsibility for their investments.