Author: Hu Tao, ChainCatcher
Nearly three months later, the impact of the 1011 incident continues to unfold, even bringing an unprecedented reputational crisis to Binance and its founder, CZ.
In the past few days, the timeline of encryption-related content on the social platform X has been almost entirely filled with criticism and attacks against CZ. Many KOLs have called him a "fraudster" and he is generally considered to have suffered a "persona collapse" and "traffic backlash".
The incident stemmed from a statement made by Cathie Wood on a Cathie Wood program. She pointed out that Bitcoin's recent pullback from its highs was influenced by the $28 billion deleveraging event triggered by the Binance software glitch on October 10th. She analyzed that the current market selling pressure has largely subsided, 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 resuming its upward momentum.
In the previous 1011 event, cryptocurrencies such as Bitcoin experienced a sharp decline, wiping out over $500 billion in the global crypto market capitalization and liquidating over $19 billion in leveraged positions. This was arguably the largest leveraged liquidation event in the history of the crypto industry, causing significant losses for everyone from ordinary users to well-known market makers and venture capitalists. One prevailing view is that the event was closely related to anomalies in Binance's liquidation mechanism; Binance subsequently modified the candlestick charts of some cryptocurrencies showing unusual price movements.
Given Cathie Wood's significant influence in both traditional finance and the crypto space, and her status as an early investor in Coinbase and Bitcoin, her remarks brought the painful memory of the 10/11 attacks back into the spotlight for many crypto users. This, in the current sluggish crypto market, has once again stung investors' emotions.
Among the early voices, Leonidas, co-founder of Zap/Ord.io, was one of the most influential, vehemently stating on Twitter that CZ is not only the biggest cryptocurrency scammer in history, but also the biggest scammer in the history of human civilization. The world has never seen such large-scale fraud, manipulation, and corruption as Binance is now. Send this man back to jail!
Crypto trader Anglio also tweeted that CZ was the culprit behind the 10/10 liquidation. He said that because he tried to kill HYPE, he ended up killing his own space instead. CZ is a complete criminal. The comments section was filled with tweets like, "You scammed others, ruined people's lives, destroyed the market, and then pretended to be a good person."
These statements all focused on the 1011 liquidation incident, arguing that Binance bore primary responsibility for it, yet consistently failed to release a public investigation report or acknowledge the problems. Furthermore, almost all of the cryptocurrencies newly listed on Binance last year experienced significant price drops, resulting in substantial losses for investors. Therefore, CZ, as Binance's largest shareholder, became the target of their criticism.
Perhaps due to Binance's long-term accumulation in maintaining KOL relationships and the information cocoon created by the X recommendation logic, such voices did not spread much in the Chinese X circle in the early stages. However, starting from the 28th, the huge negative energy accumulated in the English-language discussions inevitably spread to the Chinese X circle, and many well-known bloggers also began to criticize Binance sharply.
Renowned crypto trader Chuanmu tweeted that when will Binance apologize and compensate all exchange users for the events of October 11th? He said that the two owners of Binance have been diverting attention and remaining silent to evade responsibility, reaping billions of dollars in assets from users and market makers in a single day, turning the entire industry into a Dubai scam factory assembly line!
OKX founder Star Xu also tweeted on the 28th that the incident has caused real and lasting damage to the industry. Leading companies in the industry should focus on strengthening their core infrastructure, building trust with global users and regulators, and protecting the company's long-term interests.
However, Binance founders CZ and He Yi refuted all external criticisms. CZ first linked many negative tweets to organized attacks, pointing out that some previously unfamiliar accounts posted highly similar content in a short period of time, showing obvious characteristics of copying and amplification, and the overall behavior was more like a systematic operation than natural discussion.
Following this, CZ responded again to the criticism of the low quality of listed tokens, pointing out that in any industry, most companies/projects will fail. The few successful cases will grow exponentially. No one can predict the future development of a project. Exchanges should try to give opportunities to hardworking projects. You don't need to buy every project listed on an exchange.
He Yi further linked these criticisms to the changes of the times and conflicts of interest. "When the world is changing, it is often accompanied by a lot of discussion, questioning and different voices. This is not unique to any one industry, but a process that has occurred repeatedly in all structural changes throughout history,"He Yi said. "The discussions surrounding the crypto industry and Binance have complex origins, including emotional fluctuations brought about by market cycles, as well as differences in business competition, models and positions."
Some KOLs are echoing He Yi and CZ's views. For example, CryptoJuice believes this may be a phase in the competition and fragmentation of the crypto market between East and West. "Cathie Wood" ( a nickname for He Yi) has always been a mouthpiece for Western capital; her remarks are often bolder, more direct, and exaggerated. During the Bitcoin surge, Cathie Wood publicly declared millions of dollars, fueling the trend. She acts as a signal flare; this attack on Binance may also be her way of speaking for some top Western capital groups.
However, in today's public opinion environment, completely shirking one's own responsibility and attributing the problem entirely to online troll attacks and business competition has become a behavior that greatly reduces user goodwill. This will not only fail to stop the related controversy, but will also further amplify the negative emotions of investors, and the related discussions about the X platform are still spreading.
In a persistently sluggish market, investors tend to seek outlets for their negative emotions. For a long time, figures like CZ, as the biggest beneficiaries in the industry, have failed to fulfill their responsibilities, focusing solely on urging people to use HODL on Twitter and generating considerable controversy regarding coin listing reviews and industry ecosystem development. Therefore, they quickly became targets of public criticism under this trigger. However, demonizing CZ as the "biggest fraudster in the industry," ignoring market cycles, user responsibility, and the scale effect of the platform, seems unfair.
Ultimately, in this sector that is still in a stage of rapid, unregulated growth, in this highly volatile and cyclical speculative market, there is no pure "savior" nor an eternal "devil."
