Binance Fights Back: Debunking Insolvency Rumors and Uncovering Coordinated Smear Campaigns

Binance, the world’s largest cryptocurrency exchange, has recently found itself at the epicenter of a significant FUD (Fear, Uncertainty, Doubt) storm. The controversy ignited when an X user, Lewsiphur, propagated rumors alleging Binance’s insolvency. These claims escalated dramatically when the user subsequently presented a purported “lawyer’s ultimatum” from Binance, threatening legal action unless the posts were removed. Binance swiftly and unequivocally refuted these allegations, labeling the document a “malicious fabrication” and not originating from the exchange.

The Genesis of the FUD: Insolvency Claims and a Fabricated Ultimatum

The incident commenced on a Wednesday when X user Lewsiphur posted an assertion that “Binance is insolvent.” The post further warned that a potential collapse of Binance would unleash market devastation “far more catastrophic than the FTX collapse.”

Well looks like it’s all unfolding and the truth is coming out

Binance is insolvent and they are solely responsible for 10/10.

The effect this will have on the market will be catastrophic.

This is far worse than the FTX collapse. https://t.co/kD0ZXt8sNn

— Lew (@Lewsiphur) February 3, 2026

Shortly thereafter, the same user published another post, claiming to have received an official “cease-and-desist letter” from Binance. A screenshot of this document, which threatened legal action if the offending posts were not deleted by 5 PM EST, quickly went viral. This rapidly amplified market anxieties surrounding Binance’s financial stability.

Binance’s Resolute Response: Debunking the Fabrication

Binance’s official customer service channels moved quickly to address the escalating rumors. They categorically denied any involvement with the purported legal document. In a direct response, Binance stated: “This letter is absolutely not issued by Binance. It is a fabricated document of an overly imaginative nature. Please stay vigilant and beware of fake documents and misleading information.”

Despite the alleged legal threats, Lewsiphur’s posts remained online. The user even announced plans for a live stream to present “key evidence” of Binance’s bankruptcy, while notably embedding online casino advertisements within these very posts – a move that raised further questions about the user’s motives.

A History of Scrutiny: Connecting Current FUD to Past Market Events

This recent wave of skepticism is not an isolated incident. Over the past few weeks, social media has seen recurring “Binance insolvency” rumors, many of which draw parallels to the significant market downturn in October 2025. During that period, the cryptocurrency market experienced severe turbulence, driven by high leverage, thin liquidity, and broader macroeconomic pressures. Users reported issues such as account freezes, failed transactions, and abnormal deposit/withdrawal activities during extreme volatility. Binance has consistently denied being the cause of that market crash.

Changpeng Zhao (CZ), the founder and former CEO of Binance, has previously addressed such accusations in public AMAs, dismissing them as “too far-fetched and inconsistent with the facts.”

Community Calls for Self-Custody and Binance’s Confidence

Despite Binance’s reassurances, the crypto community’s long-standing trust issues remain. Recently, some users have actively encouraged a “collective withdrawal movement,” urging others to move their digital assets from centralized exchanges like Binance to self-custody wallets.

Addressing these community-led withdrawal campaigns, Binance co-founder Yi He demonstrated the exchange’s confidence. She remarked: “Some friends in the community have initiated a vigorous withdrawal campaign. Although the number of assets in Binance addresses has increased after the campaign was launched, I believe that regularly stress-testing all platforms is a very effective stress test.”

Yi He also emphasized the critical importance of careful verification during withdrawals, cautioning users: “Don’t transfer to the wrong address; a mistake on-chain is irreversible.”

Some friends in the community have initiated a withdrawal campaign. Although the number of assets in Binance addresses has increased after the campaign was launched, I believe that regularly initiating withdrawals from all trading platforms is a very effective stress test.
I… pic.twitter.com/U8TyHDHeLH

— Yi He (@heyibinance) February 4, 2026

Unmasking the Campaign: Evidence of Coordinated Smear Tactics

Beyond denying the specific legal threat, Binance has gone a step further, publicly releasing findings from its internal investigations. These findings suggest that the recent surge in negative social media sentiment is not merely the work of isolated individuals but rather an organized smear campaign exhibiting highly coordinated characteristics.

Data collected by Binance indicates a proliferation of X accounts displaying the following shared traits:

• Account IDs and nicknames uniformly incorporate “BNB” alongside Chinese names.
• Personal profiles deliberately emphasize connections to “China.”
• The use of AI-generated photos featuring Changpeng Zhao (CZ) to project an image of a long-term BNB holder.
• Simultaneous mass posting of “close Binance account” and “collective withdrawal” messages.
• Highly consistent visual assets, including identical image sizes and compositions.
• Past content predominantly focused on promoting Solana and Hyperliquid.
• A majority of these accounts were renamed or repackaged after October 2025, with minimal Binance-related content published prior to that period.

The investigation highlights a significant shift: these accounts, which did not criticize Binance during the October 2025 market turbulence and were even engaged in promoting projects, abruptly pivoted in late January 2026 to launch an intensive FUD offensive against the exchange. This pattern strongly suggests a classic “information warfare” operational mode.

Binance’s findings further reveal that these accounts not only reposted each other’s content and used identical materials, but also frequently reused profile pictures and AI-generated photos. This level of synchronization points to clear coordinated behavior and a shared interest among the perpetrators.

Navigating the Noise: Investor Vigilance in a Volatile Market

Whether Binance faces substantive risks remains contingent on further transparent information and the passage of time. However, what is undeniably clear is that in today’s highly emotional and fast-paced market environment, the intertwining of genuine and fabricated information, community manipulation, and a continuous battle for trust have become inherent risks within the crypto space.

For investors, the ability to discern facts amidst the constant noise and to critically understand the true sources of risk is arguably more crucial than reacting to any single rumor. Vigilance, critical thinking, and a focus on verifiable data are paramount for navigating the complexities of the digital asset landscape.