CZ Debunks Allegations Of Bitcoin Dumping
– Binance CEO, Changpeng Zhao (CZ), addresses allegations of a significant sell-off of Bitcoin (BTC) by Binance.
– These allegations have been linked to a 7% BTC price drop.
– CZ responds to the allegations on Twitter, reposting a thread by a user named ZkHopium, who debunks the claims.
– ZkHopium’s analysis focuses on the Binance Coin (BNB) liquidation on Venus Protocol and explains that the exploit occurred on October 6th, 2022.
– The BNB chain burned over 2 million BNB, effectively removing them from circulation.
ZkHopium’s Analysis of Venus Protocol
– 900,000 BNB were deposited on Venus Protocol to borrow approximately $150 million worth of USDT and USDC.
– Venus Protocol passed a governance proposal designating BNB Chain as the sole liquidator for the loan.
– BNB Chain funded the liquidator’s wallet with 30 million BUSD in December 2022, an additional 30 million USDT in June 2023, and another 30 million USDT on August 21, 2023.
– The liquidation mechanism involves a collateral factor or liquidation threshold, and liquidators can gradually liquidate up to 50% of the collateral.
– The liquidations are performed manually, without the involvement of bots front-running the process.
CZ’s Response and BTC Trading
– CZ appreciates the detailed research presented by ZkHopium and emphasizes the “insignificance” of a $30 million liquidation’s impact on Bitcoin’s price.
– Binance does not issue BTC and most rewards are given in BNB.
– $30 million represents less than 0.001% of BTC’s daily trading volume.
– BNB is currently trading at $217, with a marginal decline of 0.2% over the past 24 hours.
– Bitcoin is valued at $26,000 and has experienced a decline of 2.4% after briefly touching $26,700.
– Anticipation is building for Federal Reserve Chairman Jerome Powell’s comments at the Jackson Hole Symposium, which could significantly impact the cryptocurrency market.
Hot Take
The allegations of Bitcoin dumping by Binance have been debunked by CZ, who highlights the insignificant impact of the $30 million liquidation on BTC’s price. The analysis provided by ZkHopium sheds light on the Venus Protocol liquidation and clarifies the manual process involved. As the market awaits Jerome Powell’s speech, Bitcoin’s volatility may increase, influenced by economic reports and Powell’s narrative. Traders and investors are preparing for potential market fluctuations and recognize the significance of Powell’s statements on the cryptocurrency market.
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