On February 4, 2026, Binance firmly denied issuing a cease-and-desist letter to X user Lewsiphur, who alleged the exchange’s insolvency and warned of a collapse worse than FTX, per The Block. The user posted a purported legal notice demanding deletion of the claim by 5 p.m. ET, but Binance Customer Support labeled it a “forgery with a very active imagination,” urging vigilance against misinformation. The post remains live, with Lewsiphur planning a livestream to present evidence while promoting an online casino, per. X posts from @binance amplified the denial, gaining traction amid ongoing FUD.
Rumors trace back to the October 10, 2025, liquidation cascade, where the crypto market cap fell over 33%, with users reporting frozen accounts, failed orders, and withdrawal issues on Binance, per. Former CEO Changpeng Zhao dismissed insolvency claims as “far-fetched” in Q&A sessions. Co-founder Yi He encouraged withdrawal campaigns as “effective stress tests,” noting increased assets post-campaign, per. Despite USDT’s Q4 growth to $187.3B market cap and 534.5M users, Binance’s platform issues fueled distrust.
The incident highlights persistent FUD in crypto, with calls for self-custody withdrawals echoing FTX’s 2022 collapse, per. Binance’s transparency, including reserve proofs and SAFU fund, counters claims, but leverage and liquidity risks remain, per. Tether’s $192.9B reserves, including 96,184 BTC, underscore stablecoin stability, per. SEC scrutiny and regulatory delays on ETFs exacerbate sentiment, per. Investors should verify claims via binance.com and monitor on-chain flows on CryptoQuant and TradingView.
Binance’s denial and Yi He’s stress test endorsement signal resilience, but FUD could pressure BNB ($880) and BTC ($71,200), per CoinMarketCap. Investors should dollar-cost average with stop-losses below BTC’s $70,000, diversify into USDC, and follow @TheBlock__ on X for updates, per Techopedia. Binance’s GTR integration with Circle for USDC compliance bolsters trust, per. While insolvency fears lack evidence, the October crash lessons urge caution in leveraged trading.
