Binance slashed 94.1% of its Bitcoin holdings and 99.9% of Ethereum reserves between January and February 2025, blockchain data reveals. The exchange converted $4.33 billion in BTC and $5.83 billion in ETH to USDC, spiking its stablecoin reserves by 57.5%.
Critics argue the timing, which is just 10 days before Bybit’s $1.46 billion hack. This raises red flags. “Crypto never has coincidences,” asserted analysts, questioning Binance’s foresight. Meanwhile, Bybit lost 499,395 ETH on February 21, marking the largest crypto theft ever. Did Binance act on undisclosed information?
Bybit Hack Fallout
The correlation between Binance’s Ethereum liquidation and Bybit’s breach has ignited speculation. Days before the hack, Binance reduced its ETH exposure to a mere 175 tokens. Simultaneously, its USDC holdings surged to $1.26 billion. “This wasn’t a minor rebalance,” noted an industry expert. “It was a calculated exit.”
Bybit’s stolen ETH represented 16% of all historical crypto hack losses. Observers highlight eerie parallels: Binance’s sell-off aligned perfectly with hackers’ preparations. Blockchain analysts like ZachXBT and Arkham urge deeper probes into potential insider links.
Wintermute’s Role
Binance’s liquidation spree extended beyond BTC and ETH. On-chain data shows Wintermute, a liquidity provider, withdrew 103,570 SOL ($16.32 million) from Binance hours before Solana’s 8% drop. Ethereum faced similar turbulence with 25,000 ETH ($80 million) sold to Wintermute and Symbolic Capital, which preceded a 3.5% price plunge.
Contrary to rumours, Wintermute clarified it purchased SOL via order books, not direct Binance sales. However, the exchange’s $110 billion market purge in 24 hours deepened distrust. “Binance uses assets to manipulate markets,” argued critics, citing unregulated “casino-like” practices.
$110B Liquidated as Crypto Prices Plummet
The crypto market reeled as Binance’s sell-off triggered cascading liquidations. Bitcoin tumbled 12%, while Ethereum sank to $2,500, a four-month low. Solana dipped below $140, erasing October 2024 gains. Retail traders accused Binance of engineering “max pain” to benefit its futures casino.
Meme coins like TRUMP also crashed 7%, slicing $150 million from its valuation. Though Binance denied selling TRUMP, its token swaps coincided with the token’s collapse. “The blockchain doesn’t lie,” tweeted MartyParty, urging users to flee centralised exchanges.
Experts Warn Against Offshore Exchange Risks
Binance’s actions spotlight dangers of unregulated platforms. Analysts caution against storing assets on offshore exchanges like Bybit, OKX, or MEXC, citing market manipulation risks. “They’ll liquidate longs and shorts to survive,” warned a trader.
Global regulators face mounting pressure to intervene. Until then, advocates urge self-custody via hardware wallets. “Leave nothing on Binance,” emphasised a blockchain advocate. “Their loyalty is to profit, not users.”
Skepticism Grows as Binance Silence Speaks Volumes
Binance CEO Changpeng Zhao (CZ) blocked critics questioning the liquidation, further fuelling skepticism. While the exchange claims routine portfolio adjustments, the precision of its timing remains unexplained.
Crypto communities demand transparency. “Repost this; it’s bigger than it looks,” implored one analyst. As investigations unfold, the saga underscores crypto’s Wild West reality: without regulation, trust hinges on code, not corporations.
Written By Fazal Ul Vahab C H
