Binance founder Changpeng Zhao has publicly denied allegations that the exchange secretly profited more than 60,000 BTC by hedging client exposure on BitMEX during the March 2020 market crash.
The claim, which circulated widely on social media, alleged that Binance used BitMEX to offset customer risk during the Covid-era liquidation cascade and booked massive profits in the process. Zhao dismissed the story as “fake news,” calling it fabricated and technically implausible.
CZ pushes back on hedge narrative
Responding to a viral post, Zhao stated bluntly that “Binance never traded on BitMEX.”
He also pointed to a key operational constraint in 2020: BitMEX processed withdrawals only once per day at the time. According to Zhao, that structure would have made real-time hedging of tens of thousands of BTC operationally impractical during a fast-moving market crash.
He tagged Arthur Hayes to highlight the issue, emphasizing that logistical realities contradict the hedge theory.
Traders and BitMEX weigh in
Several market commentators echoed Zhao’s skepticism. Analysts argued that trapping 60,000 BTC inside a manual multi-signature withdrawal system during a black swan event would have been operationally risky and inefficient.
BitMEX has also reportedly stated that it holds no records supporting the alleged flow of that magnitude.
Since 2020, BitMEX has upgraded its infrastructure from once-daily batch withdrawals to real-time payouts, but at the time of the crash, liquidity constraints were more rigid.
FUD and crypto’s rumor culture
The episode highlights a broader issue within crypto markets: how historical anecdotes can evolve into conspiracy-style narratives without verified documentation.
Critics of Binance have argued that the exchange has played a central role in past market dislocations, referencing events such as the collapse of FTX and the failure of Terra’s LUNA ecosystem. Supporters counter that such claims often blend speculation with incomplete information.
In highly volatile markets, screenshots and social posts can sometimes move sentiment faster than audited disclosures.
Market context
The renewed debate comes as crypto markets remain sensitive to macro conditions:
- Bitcoin (BTC) trades near $68,000 after recent volatility.
- Ethereum (ETH) hovers near the $2,000 range.
- Solana (SOL) trades around $78–$81.
As digital assets continue to reflect broader risk appetite, narratives around exchange behavior and historical trading activity can quickly resurface during volatile periods.
For now, Zhao maintains that the 60,000 BTC hedge story is fiction, not fact.
