Key Takeaways:

• Former Binance CFO Wei Zhou closed his account, citing frustration with alleged manipulation tied to CZ.
• OKX’s Star Xu blamed Binance’s USDe leverage setup and an oracle error for the $19B October 2025 crash.
• CZ denied the claims, calling them a coordinated smear as scrutiny on Binance intensified.

Former Binance Chief Financial Officer Wei Zhou announced via an X post on  February 3, 2026, that he closed his account on the exchange, citing frustration with manipulation promoted by founder Changpeng Zhao (CZ). 

The announcement adds to mounting pressure on Binance as industry leaders and competitors question whether the world’s largest cryptocurrency exchange has contributed to market instability. Recent weeks have brought intensifying accusations about Binance’s role in the October 2025 flash crash and broader manipulation allegations.

OKX founder Star Xu blames Binance for historic crash

The criticism centers largely on the  October 10, 2025, market collapse after US President Donald Trump announced  100% tariffs on Chinese imports. The event wiped out more than $19 billion in leveraged positions (amplified crypto price bets made with borrowed funds) in the crypto market. Bitcoin dropped approximately 15% within hours, falling from $122,500 to nearly $104,500, while many altcoins lost over 40% of their value.

OKX founder Star Xu publicly blamed Binance’s promotional campaign for Ethena’s USDe synthetic stablecoin (digital currency designed to hold a steady value through hedged crypto positions rather than cash reserves) for creating the conditions that led to the crash. 

Xu argued in an X post on  January 31, 2026 that Binance offered 12% yields on USDe while allowing traders to use it as collateral (assets pledged to secure loans), with the same treatment as liquid stablecoins like Tether (USDT) and USDC, which are backed by real cash or equivalents and can be easily bought, sold, or redeemed without major price swings. This setup encouraged excessive leverage that unwound violently when volatility struck on 10 October.

Binance confirmed that a pricing oracle error contributed to the crash. Between 6th and 14th October 2025, the exchange updated its price oracle system, which supplies asset prices (external data) for its margin trading platform. 

During this window, USDe briefly traded at 65 cents on Binance while other exchanges maintained near-parity pricing. This discrepancy triggered automatic liquidations across the platform. Binance distributed approximately $683 million in compensation to the affected users.

Multiple voices raise concerns

Beyond the October 2025 incident, additional accusations have surfaced. A woman identifying herself as Justin Sun’s former girlfriend claimed on  February 1, 2026, that the Tron founder opened multiple Binance accounts using his employees’ phones and identities to manipulate TRX token prices through coordinated account activity. 

She stated she plans to provide evidence, including chat records, to US authorities. These claims echo 2023 Securities and Exchange Commission allegations that accused Sun of wash trading (i.e., creating artificial trading volume without genuine ownership changes).

Investment manager Cathie Wood referenced the October crash in a late January television interview, describing it as a software glitch that forced massive deleveraging. Her comments drew a response from Binance co-founder and co-CEO He Yi, though the post was subsequently deleted.

CZ calls the accusations a coordinated campaign

During a 30 January 2026 community session, CZ dismissed the allegations as fear-driven attacks designed to harm market confidence. He suggested that newly created social media accounts were posting identical negative messages and emphasized that such campaigns damage the entire market. 

CZ, who stepped down from daily operations after pleading guilty to anti-money laundering violations in 2023, maintained that external factors like the US tariff announcements caused the 10 October 2025 volatility.